Condo and Townhome Insurance

FAQs About Townhome Insurance

What’s the difference between a townhome and a condo?

While both townhomes and condos are multi-family dwellings, they differ mainly in ownership structure:

• Townhomes are typically row-style homes where the owner owns both the interior and exterior of the property, including the land. Townhome owners are usually responsible for maintaining the exterior, roof, and yard.
• Condos (or condominiums), on the other hand, involve shared ownership. Condo owners own the interior of their unit, while the exterior and common areas (such as hallways, elevators, and amenities) are typically owned by the condominium association.

What’s the difference between an HO6 and HO3 policy?

• HO6 Insurance is designed for condo or townhome owners. It covers personal property inside the unit and liability protection, as well as covering the interior structure (walls, flooring, etc.) of your unit in case of a loss. The HOA (Homeowners Association) generally covers the building’s exterior, so you only need insurance for what’s inside.
• HO3 Insurance is the standard homeowners policy for single-family homes, which provides coverage for both the structure of the home and the personal property inside. An HO3 policy typically includes more extensive coverage, as it protects the building structure as well as personal belongings, including liability.

HO6 Policies are typically cheaper than HO3 Policies because they cover less. In simple terms, if you own a townhome, you’ll likely need a minimum of HO6 coverage. If your HOA or Master building Policy doesn’t cover the entire structure of your building you will probably want or need HO3 coverage. To help you compare HO3 vs HO6 check out this great article.

What does townhome insurance cover?

Townhome insurance generally covers:

• Dwelling Coverage: Protection for the interior of your townhome, such as walls, floors, ceilings, and fixtures.
• Personal Property: Coverage for your belongings, such as furniture, electronics, clothing, and other valuables.
• Liability Protection: If someone is injured while on your property, this will help cover their medical expenses or any potential lawsuits.
• Loss of Use: If your townhome becomes uninhabitable due to a covered event, this provides compensation for temporary housing.
• Additional Coverages: Optional coverage for flood, earthquake, or personal injury, depending on your needs.

Do I need Unit Owners Special Coverage A?

Special Coverage A is an inexpensive endorsement on your condo insurance policy that changes your policy to “Open-Perils” coverage. Adding this endorsement means the insurance company will cover damage from every peril unless it is listed in the exclusions. Learn more and get examples here.

Do I need flood insurance for my townhome?

If your townhome is located in a flood-prone area, or if your mortgage lender requires it, you may need additional flood insurance. Standard townhome insurance policies typically don’t cover flooding, so it’s a good idea to talk to an agent about adding this protection.