Condo Insurance in NJ: What New Buyers Need to Know About Master Policies and HO-6 Coverage
- Adam Overmyer
- 49 minutes ago
- 5 min read
Buying a Condo in NJ? Here’s What Insurance You Actually Need
If you’re buying a condo in New Jersey, one of the most confusing parts of the closing process is insurance.
I receive calls every week from new condo buyers who say:
“My lender says I need condo insurance… but doesn’t the association already cover the building?”
The answer is: maybe — but not the way you think.
Before purchasing a condo insurance policy (also called an HO-6 policy), you must first understand:
What does the condo association’s master policy actually cover?
That single question determines how much protection you need.
Watch: Condo Insurance Explained for New Buyers
In this video, I explain why reviewing the condo association’s master insurance policy is the most important first step before choosing your coverage.
Now let’s break it down in more detail.
What Is a Condo Master Insurance Policy?
A condo master policy is the insurance policy purchased by the condominium association (or HOA). It is designed to protect the portions of the property that are the association’s responsibility.
It typically covers:
The roof
Exterior walls
Structural framing
Common areas
Hallways
Elevators
Shared building systems
This coverage protects the buildings and common elements within the community that are maintained by the condo association.
However, what the master policy covers inside your individual unit depends entirely on how the association’s policy is structured. Some policies extend further into the unit, while others stop at the structural framing.
Understanding this distinction is critical before purchasing your own condo insurance policy.
In New Jersey, there are two common types of master policies.
1. Walls-In Master Policy Coverage
A walls-in master policy may cover:
Interior walls
Flooring
Cabinets
Built-in features
Standard fixtures
If your association carries this type of policy, you may primarily need:
Personal property coverage
Liability coverage
Loss assessment coverage
Limited improvements and betterments coverage
However, this structure is less common in NJ than many buyers assume. It is always best to contact the association first to get a better understanding of the coverage in place for the community.
2. Bare Walls (Studs Out) Master Policy
A bare walls master policy is very common in New Jersey.
Under this structure, the condo association’s master policy typically covers the building from the “studs out.” In other words, it insures the structure itself and the common areas, but not the finished interior of your individual unit.
The master policy generally covers:
Roof
Exterior walls
Structural framing
Common areas (hallways, stairwells, lobbies, elevators)
However, the unit owner is responsible for everything “walls-in,” including:
Drywall and interior walls
Flooring
Cabinets
Kitchen and bathroom fixtures
Built-in features
Any upgrades or renovations made to the unit
If your association has a bare walls master policy, your HO-6 condo insurance must include sufficient dwelling coverage (Coverage A – Improvements and Betterments) to protect these interior components.
This is where many first-time condo buyers make costly mistakes. They assume the association covers more than it actually does — and end up significantly underinsured.
What Does Condo Insurance (HO-6) Cover in NJ?
A properly structured condo insurance policy in NJ typically includes:
Coverage A – Improvements and Betterments
Protects interior structures you are responsible for.
Coverage C – Personal Property
Covers furniture, electronics, clothing, and other belongings.
Personal Liability Coverage
Protects you if someone is injured inside your unit.
Loss Assessment Coverage
Helps if the association assesses unit owners for a shared loss.
Additional Living Expenses
Covers temporary housing if your condo becomes uninhabitable due to a covered claim.
How Much Condo Insurance Do You Need in NJ?
The amount of coverage you need depends entirely on the master policy.
If the master policy is bare walls, many NJ condo owners may need:
$50,000 to $150,000 or more in dwelling coverage
Adequate personal property limits
Strong loss assessment coverage
Assuming the association covers everything inside your unit can leave you significantly underinsured.
Why Calling the Condo Association Is the First Step
Before purchasing condo insurance, request:
A copy of the master insurance policyor
The insurance summary page
Without reviewing this document, it is impossible to structure the correct HO-6 coverage.
Insurance should be coordinated — not guessed.
Frequently Asked Questions About Condo Insurance in NJ
What is condo insurance?
Condo insurance, also known as an HO-6 policy, protects the interior of your unit, your personal belongings, liability exposure, and certain assessments from the condo association.
Does the condo association insurance cover everything?
No. Most condo associations in NJ carry a bare walls master policy. This means the association covers the building structure and common areas, but unit owners are responsible for interior walls, flooring, fixtures, and upgrades.
In some cases, flood damage is not covered under the master policy or your standard condo policy, which is why reviewing flood insurance options in Cranford, NJ may also be important.
What is the difference between a master policy and an HO-6 policy?
The master policy covers shared building structures and common areas. An HO-6 condo policy protects the individual unit owner’s interior space, personal property, and liability.
Do I need dwelling coverage for a condo?
Yes. If the master policy is bare walls, you need dwelling coverage under your HO-6 policy to protect walls-in components such as drywall, cabinets, flooring, and built-ins.
Many condo owners also consider adding a personal umbrella policy for additional liability protection beyond their condo insurance limits.
How much loss assessment coverage should I carry?
Loss assessment coverage helps if the association’s master policy deductible is shared among unit owners or if there is insufficient master coverage. Many NJ condo owners benefit from higher limits than the standard amount included in basic policies.
How much condo insurance do lenders require?
Most lenders require:
Adequate dwelling coverage
Personal property coverage
Liability coverage
Proof of the association’s master insurance
Your insurance agent should coordinate directly with your lender if needed.
Is condo insurance required in NJ?
While New Jersey law does not mandate condo insurance for all unit owners, lenders almost always require it. Even without a mortgage, carrying an HO-6 policy is strongly recommended to protect your financial exposure.
Why Work With a Local NJ Condo Insurance Agent?
Condo insurance is not one-size-fits-all.
At The Overmyer Insurance Agency — a local Cranford NJ insurance agency — we:
Review the master policy with you
Explain what it covers in plain English
Coordinate coverage with your lender
Make sure you are not underinsured or overpaying
If you are buying a condo in Cranford, Union County, or anywhere in New Jersey, we are happy to help you structure the right coverage before closing.
Get Condo Insurance in NJ — The Right Way
If you are purchasing a condo and are unsure what coverage you need, reach out before binding your policy.
We will review the master policy and build the appropriate HO-6 coverage around it.
Request a Condo Insurance Quote Today
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