HO-6 Insurance for Co-op Owners

If you own shares in a housing co-op, you usually buy your own HO-6 policy. It covers your belongings, the improvements you made inside the apartment, your personal liability and, if you add it, your share of a special assessment. The co-op's master policy covers the building. Your proprietary lease decides where one stops and the other starts, so read it before you ask for a quote.

The HO-6 is the policy form insurers write for both condominium owners and co-op shareholders. The NAIC's definitions describe it as covering the real property interest and the personal property of people who own a unit in a condominium or share an ownership interest in a cooperative building. The form is the same. What differs is what you own: in a condo you hold the unit itself, while in a co-op you hold shares in the corporation that owns the building, plus a proprietary lease that lets you live in your apartment. That difference is why the lease matters so much more for a co-op policy. For the ownership side, see co-op versus condo ownership.

This guide covers who insures what, what a board or lease can require, how a co-op gets named on your policy, how to treat sublets and renovations, and a checklist for comparing quotes. It is written for US shareholders. Insurance is regulated state by state, so treat it as a map of the questions to ask, then check your own lease and your own policy. For the wider picture, including business cover and insurers that are themselves co-ops, start at the co-op insurance guide.

Master policy versus your own policy

A housing co-op is one corporation that owns one building. It buys a master policy for the building and the corporation's liability. You buy a policy for what is yours. The NAIC notes that an HO-6 has no building coverage other than the unit owner's insurable interest, which is why the building itself sits on the master policy.

The catch is that "what is yours" varies from building to building. Some master policies cover everything inside the apartment as originally built, including fixtures and finishes. Others stop at the bare walls. Your lease, house rules and the master policy together decide it.

Item	Usually the master policy	Usually your HO-6	Check
Roof, structure, hallways, lobby	Yes	No	Rarely in doubt
Building-wide liability (common areas)	Yes	No	Ask for the certificate of insurance
Walls, floors and fixtures as originally built	Depends on the building	Depends on the building	Ask the managing agent which applies
Upgrades you or a previous owner made	Often not	Yes, as improvements	Ask for the amount to insure
Furniture, clothes, electronics	No	Yes	Replacement cost or actual cash value?
Your liability if a guest is hurt in your home	No	Yes	Limit and the lease minimum
Your liability if your leak damages a neighbour	Often involved	Yes	Who pays first, you or the co-op
Hotel and living costs while repairs are done	No	Yes, if included	Limit and time cap
Special assessment after a building loss	No	Only with loss assessment cover	Limit

If you are not sure which column an item belongs in, treat it as yours until the board or managing agent tells you in writing that the master policy covers it.

What an HO-6 covers for a co-op shareholder

Most policies bundle several coverages. Names differ between insurers, so match the idea, not the label.

Personal property. The NAIC describes the HO-6 as broad "named-perils" cover for the personal property of condominium or cooperative unit owners. Named perils means the policy lists what it covers (fire, theft, and so on) instead of covering everything not excluded. Read the list. Ask whether the payout is replacement cost or depreciated value.

Improvements and betterments. These are the things you or a former owner added: a new kitchen, built-in cabinets, better flooring. Whether the master policy already covers them depends on the building. Where it does not, they fall to you. Ask the managing agent for a written description of what the master policy treats as the original apartment, then insure the difference.

Personal liability. If someone is injured in your home, or your apartment causes damage elsewhere in the building, liability cover pays defence costs and damages up to your limit. The NAIC says condominium and co-op unit policies are similar to owner-occupied homeowners policies on covered perils, contents cover and liability. Check your own policy for the liability limit.

Loss of use. If a covered loss makes the apartment unlivable, this pays extra living costs for a period. Ask for the cap.

Loss assessment. If the master policy has a large deductible, or a loss exceeds it, the co-op may charge shareholders. Some policies pay part of that charge under a loss assessment cover or endorsement. Ask whether yours includes it, what the limit is, and which kinds of charge it pays. Treat the limit as a number to choose, not a default to accept.

A hypothetical assessment

The figures below are invented to show the mechanics. They are not typical costs.

Suppose a building has 100 equal apartments. A burst pipe causes damage that the master policy covers except for a deductible of $100,000. The board decides to pass the deductible to shareholders in proportion to their shares. An apartment with 1% of the shares would be billed $1,000. If your loss assessment limit is $1,000 or more, your policy can respond, subject to its terms. If the board instead assesses for a larger uninsured repair and your share is $8,000, a $1,000 limit leaves you with the balance.

The lesson is to ask the board two questions: what is the master deductible, and how are assessments allocated? Then set your loss assessment limit with that answer in mind.

What the proprietary lease and board can require

Most co-ops ask shareholders to carry their own cover. The source of the requirement matters.

The proprietary lease. The lease is the contract between you and the corporation. A requirement written there, or authorised there, is the strongest footing for a board.
House rules. Boards adopt them to run the building. A New York co-op lawyer quoted in Habitat magazine says a shareholder insurance requirement that stems only from house rules may not be enforceable, while one written in the proprietary lease can be enforced. That is one lawyer's view, not a rule. The law differs by state, and your lease wording decides it.
Your lender. If you financed your shares, the lender may set its own insurance terms in your loan documents.

A board that has a valid requirement can generally say what cover you need and ask for proof. Boards often set liability limits. No regulator publishes a standard limit. Your lease or the board's written policy will state yours. If it says nothing specific, ask for the requirement in writing before you buy.

If you think a requirement goes beyond what your lease allows, speak to a lawyer who works with co-op law in your state. Do not rely on a trade article, including this page.

Additional insured versus certificate holder

Boards sometimes ask shareholders to name the co-op on their policy. Two terms get mixed up.

Certificate holder. In general industry usage, a certificate of insurance is proof that a policy exists. The holder is told what the policy says at the time it was issued. Being a certificate holder does not by itself give the holder rights under the policy. Ask your insurer how it handles notices of cancellation, because practice varies.

Additional insured. This means the co-op is added as an insured under the policy, with rights that depend on the wording of the endorsement and the policy.

New York's insurance regulator has addressed this in staff opinions. In Opinion 05-12-05 (December 2005) the Department said a co-op corporation may be named as an insured on a unit owner's homeowners policy, but the property coverage is enforceable by the corporation only to the extent it has an insurable interest, and the liability coverage is valid to the extent the corporation has a risk exposure. In Opinion 07-12-07 (December 2007), on a similar question about a homeowners' association, it found no provision of the Insurance Law or its regulations that required an insurer to add the association as an additional insured, and said that so long as the insurer's actions were consistent with its underwriting requirements it could not be compelled to add it. These are staff opinions on New York law, not court rulings, and other states may differ.

In practice: ask your insurer whether it will add the co-op, how, and at what cost, before you tell your board it can be done. If your insurer refuses, tell the board and ask what it will accept instead.

Sublets and rented apartments

If you sublet or let family live in the apartment, your cover may change.

Your policy. Your HO-6 may be written on the basis that you live in the apartment. Ask the insurer in writing whether the policy continues if someone else lives there, and whether you need an endorsement or a different policy.
The occupant's cover. Co-op boards often set their own rules for subtenants, which can include a renters policy of their own. Your sublet rules, usually in the lease or house rules, will say.
Your lease. Many co-ops restrict sublets or need board consent. Insurance terms often sit beside those rules.

Tell your insurer before the sublet starts, not after a claim.

Common gaps

Gaps are what turn a "covered" assumption into a rejected claim. Ask your insurer about these in writing.

Gap	What to ask
Flood	Is flood excluded? Ask your agent whether flood needs separate cover and which flood product applies to a co-op.
Water backup	Is backup from drains or sewers covered, and to what limit?
Valuables	Are jewellery, art or collections capped?
Improvements	Is the amount you insure for your upgrades realistic?
Loss assessment	Is the limit enough for your building's master deductible?
Vacancy	What happens if the apartment is empty for a period?

On flood, a standard homeowners-type policy may exclude it, and flood insurance is usually a separate product. Ask an agent who sells National Flood Insurance Program policies which form applies to a co-op building and to your own belongings. Do not assume the master policy or your HO-6 includes flood cover.

Co-op, condo and other policies side by side

	Co-op owner (HO-6)	Condo owner (HO-6)	Renter (HO-4)	House owner (HO-3)
What you own	Shares plus a proprietary lease	The unit, with a deed	Nothing in the building	The house and land
Who insures the structure	Co-op's master policy	Association's master policy	Landlord	You
Your policy covers	Belongings, improvements, liability, add-ons	Belongings, improvements, liability, add-ons	Belongings, liability	The building, belongings, liability
Where the rules sit	Proprietary lease, house rules	Declaration, bylaws	Lease	Mortgage and policy

HO-3, HO-4 and HO-6 are the industry's standard form names.

How to compare quotes

Cheapest is a poor guide if the cover is different. Use one set of inputs and compare the same things.

Get the master policy details first. Ask the managing agent for the master deductible, and what the master policy treats as the original apartment.
Get your lease requirements in writing. Liability minimum, additional insured wording, proof required.
Ask each insurer for the same limits. Personal property, improvements, liability, loss of use, loss assessment.
Match the payout basis. Replacement cost on belongings and improvements, not actual cash value, unless you choose otherwise.
Compare the deductible. A lower premium with a high deductible shifts risk to you.
Check the endorsements. Water backup, loss assessment, scheduled valuables, sublet.
Check the insurer. Your state insurance department lists licensed insurers and complaint information, and rating agencies publish financial strength grades.
Ask about the board's request. Will the insurer add the co-op, and what is the proof process?

Premiums depend on location, building, limits, claims history and more. No primary source publishes a typical price. The NAIC's homeowners report publishes average premiums by state for HO-6 policies (the current edition uses 2023 data), which is a fair benchmark for the broad level of premiums, though not for your building.

Frequently asked questions

Do I need HO-6 insurance for a co-op apartment? Usually yes. The master policy covers the building and the corporation's liability, not your belongings or your improvements. Your proprietary lease may require you to carry cover, and so may your lender.

Is a co-op HO-6 different from a condo HO-6? The policy form is the same type. The NAIC describes the HO-6 as the form for condominium and cooperative unit owners. What differs is what you own and which documents set your duties: shares and a proprietary lease in a co-op, a deed and a declaration in a condo.

Can my co-op board make me buy insurance? Boards commonly do, and a requirement in your lease is the clearest basis. A New York co-op lawyer quoted in Habitat magazine says a requirement that comes only from house rules may not be enforceable, and the law varies by state. Ask the board where the requirement comes from and get it in writing.

Does the co-op's insurance cover my belongings? Not normally. The master policy insures the building and the corporation's liability. Your personal property is yours to insure.

What is loss assessment cover? It can help pay your share when the co-op charges shareholders after a loss, for example a master policy deductible. Not every policy includes it and limits vary, so ask your insurer and choose a limit with your building's deductible in mind.

Can the co-op be named on my policy? Possibly. New York's regulator said in a 2005 opinion that a co-op corporation may be named as an insured, with limits on what it can enforce. In a 2007 opinion on a homeowners' association it said an insurer consistent with its underwriting requirements cannot be compelled to add one. Ask your insurer.

How much does co-op insurance cost? It depends on your state, building, limits, deductible and claims history. The NAIC publishes average HO-6 premiums by state, which gives a general benchmark. Use real quotes with identical limits to compare.

Where can I find co-op insurance in New York City? The same way as anywhere: get your lease and master policy details, then ask several insurers or an independent broker for quotes with the same limits.

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