Condo Special Assessments and Insurance Premiums and HO-6 Policies
Some condo HOAs include the master insurance policy within the monthly HOA dues. Other HOA's bill the insurance premiums separately. In this case, the HOA assesses for insurance each year as a re-accuring special assesssment. The insurance assessment amount may be more or less in the future.
Do condo homeowners on the Gulf Coast need more than just a master insurance policy? In addition to the master insurance policy, homeowners also want to obtain an HO-6 insurance policy.
As a Gulf Coast home buyer, you want to protect your investment in a condo with the best coverage available. That's where condo insurance, or HO-6 insurance, comes in. This type of insurance is specifically designed to fill in the gaps left by your condo association's master policy.
With a condo insurance policy, your personal belongings are covered and you are protected in case of any injuries you may be held responsible for.
HO-6 Insurance Cost Estimates by Property Value
Base Average in Alabama
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Alabama average condo insurance cost: approximately $490/year (~$41/month) businessinsider.com+10trustedchoice.com+10nerdwallet.com+10.
Scaling for Luxury Properties
For properties valued significantly higher, especially in coastal markets with upscale finishes and furnishings, expect premiums to increase substantially due to higher replacement costs and enhanced coverage needs.
Estimated Annual Premium Ranges
| Property Value | Estimated HO-6 Cost (Annual) |
|---|---|
| $500,000 | $1,000–$2,000 |
| $1,000,000 | $1,500–$3,000 |
| $1,500,000 | $2,000–$4,000 |
| $2,000,000 | $2,500–$5,000 |
| $5,000,000 | $5,000–$10,000+ |
Here is an example of special assessments at Walker Key in Orange Beach
ASSESSMENT AND INSURANCE INFORMATION
If you're a Gulf Coast home buyer, you may be wondering about condo insurance and its importance. What is condo insurance? Put simply, condo insurance covers what your association's master policy doesn't - including your furniture, electronics, and other personal belongings within your unit. So, if your TV is stolen or a burst pipe damages your dining room set, your condo policy can provide reimbursement.
This term is used in the insurance industry to refer to one of several home insurance policy forms. For instance, homeowners typically opt for HO-3 policies while renters have HO-4 policies. What exactly does an HO-6 policy form cover? Simply put, it provides coverage for both condominiums and co-ops. While these two may have different ownership structures, individual insurance policies function in a similar manner. So, whether you own a condo or co-op, condo insurance can provide you with the necessary protection for your home and belongings.
What Is an HO-6 Insurance Policy?
An HO-6 policy is a special type of homeowner’s insurance designed specifically for condominium owners. Think of it as the policy that covers everything inside your walls—what’s often referred to as the interior of the unit.
This includes:
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Cabinets, flooring, countertops, and interior walls
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Appliances, light fixtures, plumbing fixtures
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Furniture and personal belongings (depending on policy)
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Liability protection
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Loss assessment (your portion of a shared damage claim on common elements)
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Loss of use/rental income (if your unit becomes uninhabitable due to a covered peril)
It pairs with the condo association’s master policy, which typically covers the building exterior, roof, common areas, and liability for shared spaces.
Why It Matters on the Gulf Coast
On the Gulf Coast, where condos face exposure to hurricanes, windstorms, flooding, and high rental turnover, having proper insurance coverage is essential. Most HOAs’ master policies are not going to cover damage inside your unit—especially for things like water intrusion from above, power surges, or short-term guest-related damage.
An HO-6 policy is usually required by mortgage lenders for financing, but even cash buyers should consider it a must-have for protection and peace of mind.
Tip: Review the Condo Association’s Master Policy First
Not all master policies are the same. Some are “studs-out” (meaning you insure everything inside your drywall), while others are “all-in” (covering certain interiors like flooring and cabinets). The only way to know what you are responsible for insuring is to read the master policy and bylaws carefully.
What Does HO-6 Insurance Cost on the Gulf Coast?
HO-6 policy pricing varies based on:
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Square footage and finishes
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Use (primary residence vs. rental)
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Deductible levels
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Additional riders (flood, wind, loss of income)
On average, you can expect to pay between $600–$1,200/year in our market. Wind coverage is typically included or required, and some carriers also offer loss assessment coverage, which is especially valuable in large buildings with high deductibles.
Who Should You Call for a Quote?
Here are a few trusted local agents who are familiar with HO-6 policies for Gulf Coast condos:
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Jessica at Whitehaven Insurance – (251) 967-5226
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Miranda Bennett at Myrick Insurance (soon becoming Point North) – (251) 923-4870
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McCarron Insurance Group – (251) 981-9999 | info@McCarronInsGroup.com
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Charles Jackson Insurance – (251) 471-4352
I’ve worked with each of these agencies and can help you secure quotes or clarify what's needed during your due diligence.