HO-6 unit-owner policy (walls-in, betterments, loss assessment)

An HO-6 is the individual unit owner's policy, and it is the mirror image of the master policy's valuation basis. Wherever the master policy stops at the unit boundary, the HO-6 is supposed to pick up. If the declaration puts the master policy on a bare-walls basis, the owner's HO-6 has to insure everything inward of the unfinished perimeter surfaces: drywall, flooring, cabinetry, fixtures, and appliances. On a single-entity or all-in master policy the walls-in exposure shrinks, but the HO-6 still carries the owner's betterments and improvements, personal property, additional living expense, personal liability, and loss assessment coverage. There is no statute that sets HO-6 limits; the recorded declaration and the master policy's valuation basis define the gap the HO-6 has to fill. This clause is the owner-side companion to the master policy valuation basis: read that basis first, because it tells the owner exactly how much walls-in coverage the HO-6 needs to carry.

A board cannot buy HO-6 policies for its owners, but the gap those policies fill is created entirely by the board's own master policy, so this is squarely a board communication duty. When the declaration or the master policy runs on a bare-walls basis, every owner who lacks adequate walls-in HO-6 coverage is self-insuring the interior of their unit without knowing it, and the association hears about it after a loss. The two figures owners most often get wrong are betterments (the master policy on a single-entity basis excludes owner upgrades, so a renovated kitchen is an HO-6 exposure) and loss assessment (the endorsement that absorbs the owner's share of a pass-through special assessment, including the master deductible). Publish three things to owners: the master policy's valuation basis in plain terms, the master deductible in dollars, and a reminder that a larger overall loss assessment limit does not by itself buy deductible pass-through protection. Loss assessment limits commonly run in the $50,000 to $100,000 band, but under the standard ISO loss assessment endorsement (HO 04 35) the portion of any assessment tied to the master policy's deductible is capped at a separate $1,000 sublimit regardless of that overall limit. An owner who wants meaningful deductible pass-through coverage has to ask the carrier to endorse that deductible-assessment sublimit upward, not just buy a bigger overall loss assessment limit.

This is an owner-education item rather than a master-policy term, so it does not show up on the association's own program the way a limit or endorsement does. The most useful thing a board can do is make the master policy valuation basis and deductible legible to owners and their personal-lines agents, because the HO-6 walls-in and loss assessment limits are only sizable once the owner knows what the master policy leaves to them. Mismatches cluster where the declaration was amended to a different valuation basis and owner HO-6 policies were never re-sized to match.