You are buying a Town Home or Condo and your Loan Officer informs you that you need an HO6 policy.   Okay, what’s that?   An HO6 policy is designed for a Town House or a Condominium.    This mainly provides coverage for the interior of your unit, if needed, and your personal property, among other important coverage.    Most of these policies are under insured.  Some drastically under insured.   A bad loss, could cause you thousands of dollars, maybe tens of thousands.   The number one area of being under insured is the Building Coverage.   Often times, per your association guidelines, you are required to cover everything in your home from the “Walls In.”    This includes Sheetrock, Cabinetry, Counter tops, Flooring, etc.   So many of the policies that I review are insured for $10,000 or $20,000.   Some new lenders have minimum percentage requirements as a condition of the loan.   These limits are not enough to replace the interior of the unit.   Number two under insured limit is personal property.    Most people do not factor in their appliances as personal property.   If you tip your building upside down, everything that falls out is personal property.   Most people have more property than they think.   Imagine replacing your wardrobe, all electronics, furniture, appliances, etc. all at the same time.   The third area of being under insured is the Loss Assessment coverage.   This is absolutely a must for the HO6 policy.    This will help cover the potential loss that you may be assessed as a result to an insurance loss to the association.    The deductibles of the Master Insurance Associations continue to increase.    Associations will turn this cost over to the unit owners.     We insure Town Homes in Blaine, Coon Rapids, Spring Lake Park daily.   We have Loan Officers that refer us business because of our expertise in this area.    Yes, these polices are cheap, but make sure that you are covered properly.   Contact us to review your coverage.