Condo and Townhouse Insurance in New Jersey
Your association’s master policy does not cover everything. A condo policy, called an HO-6, protects your unit’s interior, your belongings, your liability and your share of association assessments. Stonebrook helps condo and townhouse owners across Lakewood, Ocean and Monmouth counties match their policy to their bylaws.
Reviewed by Nate Feuerman, High Net Worth Insurance Producer at Stonebrook
Last updated
Quick answers
What does condo insurance cover?
An HO-6 covers your unit’s interior and improvements, your belongings, your personal liability, loss of use and loss assessments.
Doesn’t the association’s policy cover my unit?
Partly. Depending on your bylaws, the master policy may cover only the bare structure, or everything except your belongings and upgrades.
What is loss assessment coverage?
It pays your share when the association charges owners for a loss to common property or for its master policy deductible.
Does a townhouse need condo insurance?
It depends on how it is owned. Condo townhouses use an HO-6; fee-simple townhouses usually need a regular homeowners policy (HO-3).
What an HO-6 condo policy covers.
Your unit
Interior walls, floors, cabinets, fixtures and the improvements you or past owners made, to the extent your bylaws make them your responsibility.
Personal property
Furniture, clothing, electronics, seforim and everything else you own. Ask for replacement cost.
Loss of use
Hotel and added living costs if a covered loss makes your unit unlivable.
Personal liability
Injuries to guests and damage you cause to neighbors’ units, like a washing machine leak that runs downstairs.
Loss assessment
Your share of a special assessment for a covered loss to common areas or the master policy deductible.
Water backup
Water that backs up through drains or overflows a sump pump. Stonebrook recommends at least $25,000.
Three kinds of master policy.
Your association’s bylaws and master policy decide where its coverage ends and yours begins. Ask the management company for the master policy’s declarations page and the insurance section of the bylaws.
| Master policy type | What the association covers | What your HO-6 needs to cover |
|---|---|---|
| Bare walls | The building’s structure and common areas only | Everything inside: drywall, floors, kitchens, baths, fixtures and belongings |
| Single entity | Structure plus original fixtures and finishes | Upgrades you or prior owners made, plus belongings |
| All-in (all-inclusive) | Structure, fixtures and most improvements | Belongings, liability, loss assessment and the master deductible |
Ask about the master deductible. Some associations carry large deductibles and pass them to the owner of the unit where the loss started. Your loss assessment and Coverage A limits should be high enough to cover it.
Condo or fee simple? Check before you buy coverage.
Many townhouse communities in Lakewood and throughout Ocean and Monmouth counties look alike from the street but are owned very differently.
In a condominium, you own your unit and a share of the common elements, and the association insures the building. An HO-6 is usually right.
In a fee-simple townhouse, you own the structure and often the land under it, and you are usually responsible for insuring the whole building. That calls for a homeowners policy (HO-3) with the right dwelling limit.
Your deed and the association’s documents show which you have. Send them to us and we’ll make sure the policy form matches.
Before you choose your condo limits.
- Get the master policy declarations.Your management company can provide it.
- Read the insurance section of your bylaws.It says who insures what, and who pays the deductible.
- List your improvements.Upgraded kitchens, baths and floors are often your responsibility.
- Set loss assessment high enough.At least enough to cover the master deductible.
- Add water backup and consider flood.Especially for ground-floor and basement units.
Stonebrook is an independent insurance agency.
We don’t work for one insurance company. We work with more than 25 carriers, so we can compare condo and townhouse coverage across carriers instead of selling you a single company’s policy.
Since 1982 we have helped New Jersey families from our office in Lakewood, and we place coverage in all 50 states through our carriers and partners. When something changes, or when you have a claim, you call people who know you.
Coverage that works together.
Most families need more than one policy. Here is how the pieces fit.
Condo insurance questions, answered.
What does condo insurance (HO-6) cover?
An HO-6 covers your unit’s interior and improvements, your personal property, loss of use, personal liability and, with the right add-on, loss assessments. The association’s master policy covers the building and common areas.
Do I need condo insurance if my association has a master policy?
Yes. The master policy does not cover your belongings or your personal liability, and depending on the bylaws it may not cover your interior walls, floors or upgrades. Many mortgage lenders also require an HO-6.
What is loss assessment coverage?
Loss assessment pays your share when the association assesses owners for a covered loss to common property or for its master policy deductible. Set the limit high enough to cover the master deductible.
How much dwelling coverage do I need on a condo?
Enough to rebuild everything inside the unit that your bylaws make your responsibility, including upgrades. In a bare-walls association, that can be most of the cost of the interior.
Does condo insurance cover water damage from the unit above?
Usually, for sudden and accidental leaks, under your own HO-6 for damage to your unit and belongings. Who ultimately pays can depend on the bylaws and whether the upstairs owner was negligent. Water backup and flood are separate coverages.
Do townhouses need condo insurance or homeowners insurance?
It depends on ownership. Condo townhouses generally use an HO-6. Fee-simple townhouses, where you own the structure, usually need a homeowners policy (HO-3). Your deed and association documents tell you which.
Is condo insurance required in New Jersey?
New Jersey law doesn’t require it, but most mortgage lenders and many associations do. Even without a requirement, it protects your belongings, your interior and your liability.
Can Stonebrook review my association’s master policy with me?
Yes. Send us the master policy declarations page and the insurance section of your bylaws, and we will show you where the gaps are.
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