Condo vs. townhouse insurance—what's the difference?

Difference between a condo and a townhouse

Condos and townhouses frequently differ in appearance. Builders usually place several condo units within one building. The arrangement looks similar to an apartment complex.  
Townhouses, on the other hand, bear a resemblance to traditional houses. They are usually multi-story structures and share an outer wall with a neighbor’s townhouse. You typically won’t have neighbors living above or below you. 
Condos often feature recreational spaces such as exercise gyms, tennis courts, and swimming pools. Townhouse complexes may also have these types of facilities.

Who owns what? 

One of the key differences between a condo and a townhouse is ownership—or how much of the entire structure you own and are responsible for. Generally, owning a condo means you only own the inside of your unit. But when you own a townhouse, you may also own and be responsible for the outside walls, the roof, and the land beneath your townhouse. 
Then there are the common areas that the developer built on the premises or the complex. For example, there might be parking areas, walking areas, and play areas. 
If you own a condo, you typically co-own those areas along with your fellow condo owners as part of your membership in your Homeowners Association (HOA).

What kind of insurance do I need for a condo? 

As a condominium owner, you can find coverage especially suited for condos. It’s simply called condo insurance or HO-6 insurance. Typically, condo insurance helps protect personal belongings inside your unit, such as your clothes and furniture, against things like theft or fire.

Your condo insurance normally also offers liability protection. That means it will help protect you from medical and other expenses if a visitor is injured during a visit to your home. 
Overall, your condo insurance generally covers the things that your homeowners association isn’t responsible for repairing or replacing. The association’s insurance usually covers exterior damage such as wind damage from a storm. Typically, the association’s insurance also offers protection for the areas that are shared by all the tenants, such as walkways, elevators, and lobbies. 

What kind of insurance do I need for a townhouse? 

There is no insurance specially designed for townhouses. If you own one, you’ll want to consider a homeowners insurance plan. In other words, you’ll purchase the same type of insurance as someone with a traditional freestanding house. However, there’s a chance your costs may be lower, since townhouses often are smaller than standalone houses. 
Your townhouse insurance will typically cover personal belongings inside your home as well as the structure of the house. For example, your insurance will usually pay for items that are stolen or damaged by fire. But it will also help protect you from damage to the exterior due to things like storms. 
Like condominium insurance, townhouse insurance routinely includes liability coverage. That protects you if a visitor is injured in your home. For example, if someone slips and falls on your front step. 

Condo vs. townhouse insurance coverage 

Condo and townhouse insurance will differ according to the specific terms of your insurance plan. However, this chart gives you a general idea of what each type of insurance is likely to cover. 

Condo vs. townhouse insurance cost

Condo and townhouse insurance will also differ in price. However, both are generally less expensive than insurance for a traditional house. For example, a two-bedroom condo might not cost as much to insure as a two-bedroom house, assuming both are located in the same area. Why? Remember that, with a condo, you’re only insuring what’s inside. But with a two-bedroom house, you're insuring the entire structure and the property.Of course, not all two-bedroom condos are the same, so it might be more expensive to insure one condo than the other. Two of the primary factors that influence your condo or townhouse insurance quote are the location of the property and its age.

Other items that affect your price are the value of the personal belongings you want to insure and how much liability protection you want.

Does a homeowners association have insurance, too? 

Both condominiums and townhouses may require you to join and contribute money to an HOA, which then purchases insurance to cover the parts of the structure and complex not covered by your individual insurance. For example, the insurance policy owned by the HOA may pay for damage to the building or community’s swimming pool.

Get the proper insurance to protect your condo or townhouse 

Whether you purchase a condo or a townhouse, insurance can be key to your financial security. To help protect yourself against possible loss, take the time to ask questions about your personal coverage and the insurance that covers the building or community's common areas.