What Is the Difference Between HO-3 and HO-6?
HO-3 insures a standalone house you own, structure included. HO-6 covers a condo's interior, since the association insures the building.
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Which type you need
A single-family house needs an HO-3. A condo needs an HO-6, because the condo association's master policy already covers the building structure and common areas. Your purchase contract shows which kind of property you're buying.
What dwelling coverage pays for
On an HO-3, dwelling coverage pays to rebuild the house itself, framing, roof, walls, built-in systems. An HO-6 has little or no dwelling coverage, since the association insures that. Instead you need coverage for interior finishes like cabinets, flooring, and fixtures.
What your lender requires
Lenders require proof of coverage matching what you're buying. A condo lender will ask for an HO-6 with specific limits, often tied to the master policy's deductible. Your closing documents or loan estimate usually state the minimum coverage amount needed for the binder.
The association's master policy
If you're buying a condo, ask for the association's master policy or bylaws before you buy your own coverage. It determines whether your HO-6 needs to cover just your unit's interior or also some shared structure. That changes the limits and price you'll need.
Get the right policy before you compare prices
An HO-3 and an HO-6 price differently because they cover different things. Once you know which one your closing needs, you can compare quotes for that exact policy instead of guessing.
What a townhouse or a multi-family property needs
Not every property fits neatly into house or condo. A townhouse you own outright, including the roof and the walls, usually needs an HO-3, even if it shares a wall with the neighbor. What makes the difference is ownership of the structure, not whether it's attached. If there's no association insuring the building, nobody else is covering that roof, so the dwelling coverage has to come from your policy.
A duplex or a small multi-family building you live in and own entirely also falls under HO-3, though the dwelling coverage amount needs to reflect the full structure, not just your unit. If you're renting out the other half, tell the insurer that upfront. A policy written for an owner-occupied single-family home may not cover a rental unit on the same lot without that disclosed.
Some townhouse communities do have an association, and that's where it gets less obvious. If the association's documents show it insures the exterior walls and roof the way a condo association does, the property may call for an HO-6 instead, even though it looks like a standalone house. The same question applies here as with a condo. What does the master policy already cover, and what's left for yours to pick up. The association's governing documents, not the shape of the building, decide which policy fits.
If the purchase contract or the HOA paperwork doesn't make this clear, it's worth asking the seller's agent or the association directly before binding a policy. Getting this wrong means either paying for dwelling coverage that duplicates what the association already insures, or closing with a policy that leaves the structure uncovered. Either one can cause problems at closing when the lender reviews the binder against what's actually being purchased.
What counts as a loss of use claim under each policy
If the house or condo becomes unlivable after a covered loss, like a fire or burst pipe, both HO-3 and HO-6 policies include loss of use coverage. It pays for hotel stays, temporary rent, even extra meal costs above what you'd normally spend. The coverage works the same way in both policies. The difference is what triggers it, since that depends on what's actually damaged.
On an HO-3, damage to the structure itself, the roof, the framing, the walls, is enough to trigger loss of use if it makes the house unsafe to live in. The insurer is already covering that structure, so a covered structural loss and a loss of use claim go together. If a tree falls through the roof, you're not just filing for the roof repair. You're also filing for the hotel while it's fixed.
On an HO-6, the structure usually isn't your coverage to begin with, since the association's master policy handles it. That means a loss of use claim on your HO-6 is more likely to come from damage inside your unit, like a kitchen fire that destroys the cabinets and flooring, rather than from the condo building itself. If the building is damaged structurally and the association's policy is handling repairs, you may still need somewhere to stay while that work happens. Whether your HO-6 pays for it can depend on how the association's policy and yours are set up to interact, which is worth asking about when you're comparing the master policy and your own coverage.
Either way, the limit on loss of use coverage is usually a percentage of the dwelling or unit coverage, so it scales with how much coverage you carry overall. A policy with a low dwelling limit also carries a low loss of use limit, even if local hotel costs run high. Your declarations page will show the exact limit once the policy is written, and it's worth checking that the number makes sense for where you live before you're relying on it.
Before you lock in coverage
Check your purchase contract or HOA documents for the property type, then match your binder to that. Confirm the dwelling or unit limit against what your lender's loan estimate asks for before closing day.
