Does Your Townhouse Need Home Insurance or Condo Insurance?

• Detached and semi-detached homes, duplexes, and townhouses are usually considered freehold ownership.
• Either property type may have a homeowners' association or condo corporation that governs what residents can and cannot do in terms of renovations.
• In general, most townhouse complexes are considered condominiums, which means you need a condo insurance policy.

If you own a townhouse, do you need home insurance or condo insurance to protect your property and possessions? Though townhouses are similar to condominiums, the answer lies in the definition of your dwelling and its ownership.

A condo refers to a type of ownership and this type of housing are typically units in large buildings. Condo owners own their units, but they also co-own the common areas within the building such as the lobby, hallways, roof, and parking garage (if there is one). They are responsible for the maintenance of their units, its related property tax, as well as paying monthly condo fees that fund the upkeep of common areas and amenities. Condo owners only need to insure the interior of their units while the condo corporation insures the structure, property, and common areas.

A townhouse or row house is a multi-floor home that shares common walls and a roof with adjacent properties. Townhouses may also have attached private garages. Detached and semi-detached homes, duplexes, and townhouses are usually considered freehold ownership, meaning townhouse owners own the interior and exterior of their homes as well as the property it is on, and they are responsible for its upkeep and the property taxes associated with it. Therefore, townhouse owners need to insure the structure and property.

However, townhouses can also be considered condominiums, whereby owners own a percentage of the condo corporation and not the land.

Depending on the type of townhouse, there may be a homeowners’ association or condo corporation that governs what residents can and cannot do in terms of renovations. On that note, condo building corporations may impose stricter rules and regulations on its residents than a townhouse owners association. Both offer a hybrid lifestyle blending home ownership with community living.

What does townhouse insurance include?

Depending on the policy’s details, a townhouse insurance policy will provide coverage for:

• The interior and exterior walls
• Carpets, floors, cabinets and countertops
• Plumbing and electrical infrastructure
• The roof
• The land on which the townhouse sits
• Personal liability protection
• Your personal belongings
• Improvements or renovations you make to the townhouse
• Replacement costs and additional living expenses coverage

A typical townhouse policy will protect you from damage related to fire and smoke, lightning strikes, wind and hail, theft and vandalism, and damage from vehicles. You may need to add optional overland flood insurance and sewer backup protection to your policy to safeguard your dwelling from these types of perils, and you can choose the deductibles when setting up your policy.

What does condo insurance include?

A standard condo insurance policy provides owners with coverage for:

• The interior walls of your unit
• Carpets, floors, cabinets and countertops
• Plumbing and electrical infrastructure
• Personal liability protection
• Your personal belongings (including those kept in a storage locker)
• Improvements or renovations within the unit that you make
• Replacement costs and additional living expenses coverage

A typical condo policy will protect you from damage related to fire and smoke, lightning strikes, wind and hail, and theft and vandalism. You can choose the deductibles when setting up your policy.

The condo corporation’s insurance policy protects the building’s main structure, property, and common areas. Should an insurance claim be submitted, the deductible paid is shared by all the unit owners. Ask your condo corporation about the building’s insurance policy to understand what coverage it has as well as the deductibles and find out what its maintenance fees are to avoid any unexpected surprises.

How to tell what kind of insurance policy you need

In general, most townhouse complexes are considered condominiums, and if you pay maintenance fees, that means you need a condo insurance policy. The good news there is condo policies are often cheaper than detached home insurance policies. But check with your real estate agent or the title on the property listing to be sure.

Regardless of the type of property insurance you require, find out what your options are for coverage and premiums by comparing quotes. It’s the most effective and efficient way to find the coverage you need at an affordable price.