From the outside, condos and townhomes can be difficult to discern. Most share a similar facade and even boast many of the same interior features. There seems to be little difference between the two dwellings, yet when insurance involved, condos and townhomes couldn’t be more different. When looking into insurance for townhomes and condos, you’ll quickly find that when it comes to insurance, the responsible party and what needs to be insured are drastically disparate.
What are the differences between condo and townhouse insurance? If you’re not sure where to start, read on to understand the differences between condo and townhouse insurance.
Understanding Townhouse Insurance
Let’s say you own a townhouse. You will have to buy townhouse insurance, rather than condominium insurance. It seems easy enough, right? Sort of, many townhome owners aren’t exactly aware of how townhouse insurance works, especially in contrast to typical homeowners insurance. When you purchase townhouse insurance, the policy covers the unit and any outdoor areas that you have the title to. This includes the exterior, interior, patio, and balcony areas. The policy will typically cover some storm damage, as well as fire damage. Unlike condo owners, who do not own the land beneath their units, townhouse owners need liability protection for accidents on their property.
Understanding Condo Insurance
If you choose to purchase condominium insurance for your condo, know that insurance for the buildings and the land for which the condo sits is carried by the condo association, not you the owner. The association buys a policy that the owners pay for equally in their association fees. The association ensures the buildings and all common areas for both replacement and liability. As an owner, you will need insurance policies that cover the interior of the unit for fire, smoke, liability, theft, and other personal belongings. Unlike townhouse insurance, you do not need to carry liability protection, as the association pays for that. Generally speaking, a condo insurance policy is an HO-6.
Condo vs. Townhome Insurance: What’s What?
As mentioned above, condominium policies are regarded as HO-6 policies. These types of policies cover most interior items within a condo dwelling. Townhome insurance is regarded as an HO-3 policy, which covers single-family dwellings. Each covers specific things related to either the interior or the exterior of the home.
What’s Covered & What’s Not?
With an HO-6 condo policy, the only things covered are the things specifically listed in the policy itself. Things not listed in the policy are not covered, with no exceptions. With an HO-3 single-dwelling townhome policy, the following are typically covered:
- Fire and smoke
- Lightning strikes
- Wind and hail
- Theft and vandalism
- Falling objects
- Damage from vehicles
Some of those things might be covered in a condo policy as well, but only if they are explicitly listed on the policy. When it comes to the interior of your home, each policy also differs quite a bit in coverage. With HO-6 condo insurance, the following are covered:
- Interior walls
- Carpeting
- Countertops
- Plumbing
- Cabinets
- Personal Property
- Liability
With an HO-3 policy, all of the above items are covered, along with the following:
- Roof
- Frame
- Foundation
- Outbuildings
- Exterior walls
- Fixtures
- Property
- Liability protection
Items not covered in an HO-6 policy are typically covered by the association you pay into for your condominium each month.
Who Pays In The Event Of A Disaster?
Let’s say your condo or townhome is damaged badly as a result of a hurricane. Who pays for the damages? In the case of a condominium, the expenses are covered by the association, but not without your input. Generally, your condo association will charge you an extra fee to pay for repairs to the roof, clubhouse, or other properties that you may utilize. Luckily, loss assessment coverage will kick in when your condo association charges you extra fees from damage that was not your fault. With a townhome, insurance will pay for any covered damages that are accrued as a result of a disaster. Just as you would with homeowners insurance, you simply file a claim for any damages and go from there. As a townhome owner, you’re responsible for both the interior and exterior of your dwelling.
