Why townhomes are different
A townhome can be owned like a single-family home or like a condo. Some owners hold the land and the whole structure, roof included. Others own only the interior, while the HOA owns and insures the building. The same style of home can need very different coverage, so start with the paperwork, not the floor plan.
Getting this wrong can be costly. If you buy an HO-6 when you actually own the roof and walls, a fire or storm could leave the structure underinsured. If you buy an HO-3 when the HOA already insures the building, you may pay for coverage you don't need.
Read the HOA documents
Your HOA's declaration, bylaws and master insurance policy say who insures the roof, exterior walls and common areas. Look for language about who is responsible for repairs and which policy pays after damage.
If the documents are unclear, ask the HOA for a summary of the master policy and its deductible.
HO-3 or HO-6?
If you own the structure and the land, you usually need an HO-3, the standard homeowners policy. It covers the building, your belongings and your liability.
If your HOA's master policy insures the building, an HO-6, often called a condo policy, may fit. It covers interior walls, fixtures and improvements, your belongings and your liability. Your HOA documents say which applies.
Check shared-wall coverage
- Who insures the roof and exterior
- Who pays when damage starts in your unit and spreads next door
- The master policy deductible and who pays it
- Loss assessment coverage on your policy
- Coverage for upgrades you made, like new cabinets or floors
Fill the gaps
Your policy should cover what the HOA doesn't, plus your belongings and your liability. If the master policy has a large deductible, the HOA may pass part of it to owners. Loss assessment coverage can help pay your share of a big claim or the master deductible.
Other coverage to consider
- Flood insurance, which needs its own policy
- Water backup coverage, especially with shared plumbing
- Replacement cost on your belongings
- Umbrella coverage for extra liability
Getting a townhome quote
Bring your HOA documents and master policy summary to your agent. CapCenter's licensed insurance agents quote both homeowners and condo policies from multiple carriers, so they can help you choose the right form.
