Condo vs. Townhome: What Insurance Do You Need?

When you think “condo,” what comes to mind? Many people envision an apartment-style building with multiple floors and units. “Townhome,” on the other hand, conjures up images of a two-story home attached to two or three other homes in a row.

These pictures aren’t entirely inaccurate: the exterior style of your home is not what determines its status as a condo or townhome. The determining factor is ownership. In a condo, you own the inside of your home. The exterior, land, and common areas are owned by an association. In a townhome, you own the land beneath your unit.

This distinction becomes significant when selecting insurance coverage. Because you only own the interior of a condo, this is all you need to insure. Coverage may vary depending on your association bylaws, but you typically do not need insurance for anything beyond your four walls. With townhome ownership, you need coverage for the structure and the land it is on.

Generally, condo insurance covers items such as carpeting, plumbing, counters, and cabinets. Townhome coverage extends beyond these items to include the roof, frames, exterior walls, foundation, floor, and property.

In either situation, you need insurance for your personal belongings. You should also obtain liability coverage in both settings.

As you set up your policy, confirm with your association which types of disasters, theft, etc., are covered by their policy. With this information established, your insurance agent can help you determine what you should include in your own coverage.