Compare Townhouse Insurance

Townhouse insurance will vary based on your living situation:

  • Townhouse owner with an HOA: If you own a townhouse, and there is a homeowners association (HOA), then you can get covered with a homeowners insurance policy. Homeowners insurance works the same way for a townhouse as it does for a detached house. In this case, townhouse insurance helps pay to repair or replace your townhome or belongings in the event they are damaged in an accident, disaster, theft, or other peril.
  • Townhouse owner with condo association: On the other hand, if you own a townhouse but there is a condo association, then you can get covered with a condo insurance policy. Condo insurance works like townhouse insurance with an HOA, with one key difference: the coverage starts from the “walls-in,” meaning the exterior of your townhome is not included. In this case, the condo association will have their own master insurance policy that covers the exterior building and any common areas.
  • Townhouse renter: If you do not own your townhouse, you can get covered with renters insurance. Because it is owned by your landlord, you do not need to purchase coverage for the interior or exterior of your rental. However, renters insurance provides coverage for your belongings, along with other protections.

With any of the above living situations, if a visitor is injured in your townhome, or if you accidentally cause damage to another’s property, townhouse insurance can also financially protect you through liability coverage. For instance, let’s say your guest slipped and suffered an injury because you accidentally left the bathtub running and it overflowed. If your guest has to visit the doctor or even decides to take you to court, liability coverage would help pay for her medical bills and your legal fees. Now, let’s say that bathtub overflow leaked into your neighbor’s townhome; liability coverage would help pay for the repair bills.

Read on to learn more about townhome insurance and compare your coverage options.

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What Is Covered?

Depending on your living situation, a standard homeowners insurance policy for a townhouse can include:

  • Dwelling coverage: In the event of peril, such as an accident, disaster, theft, or vandalism, this coverage helps pay to replace your townhouse or repair its structure or exterior. If you own your townhouse and it has an HOA, you will need dwelling coverage as part of your homeowners insurance policy.If your townhouse has a condo association, you likely will not need dwelling coverage. In this case, the structure of your townhouse would be covered by the dwelling coverage of the condo association’s insurance policy. If you rent your townhouse, you will not need dwelling coverage, as your landlord’s insurance policy will cover the building.
  • Personal property coverage:  Townhouse insurance can also help pay to repair or replace your possessions if they are damaged in the event of peril. Appliances, furniture, clothes, electronics, and other belongings are typically covered by personal property coverage. For higher value items, like jewelry, art, and collectibles, it is recommended that you purchase additional coverage. Learn more
  • Personal liability coverage:> Helps pay for medical, legal, and repair costs in the event someone is injured on your property, or if you accidentally cause an injury or damage someone else’s property. Learn more
  • Loss of use coverage: Reimburses you for hotel and other living expenses while your townhouse is being fixed if it is unlivable due to peril.

Townhouse insurance will typically cover the following perils:

  • Fires (depending on where you live, it may not include wildfires)
  • Heavy winds
  • Hurricanes
  • Lightning
  • Hail
  • Heavy snow or ice
  • Sudden water discharge
  • Explosions
  • Falling objects
  • Vehicle collision
  • Theft
  • Vandalism (including damage from protests)
  • Liability if someone is injured in your townhouse

If you live in an area with increased risk for wildfires, floods, or earthquakes, you may need to purchase separate policies for these hazards. In other words, they can be excluded from a standard townhouse insurance policy.

How Much Coverage Do I Need?

As a townhome owner with an HOA, you will need dwelling coverage. The minimum amount you need will vary. For instance, your mortgage lender may have a set minimum dwelling coverage amount. That said, it is recommended that townhouse owners have enough dwelling coverage to cover at least 80% of the cost to rebuild their townhouse. In other words, if your townhouse was completely destroyed, it is best to have enough insurance to help pay for at least 80% of the cost to rebuild.

To calculate the amount of dwelling coverage you need for your townhouse, it is best to get an appraisal. You will need the appraised amount of the structure only (e.g., not the value of the land). If you had an appraisal in the past, you can estimate by first looking up the value of your townhouse on real estate websites. Then, check the document of your last appraisal to see what percent the structure represents of the total home appraisal. So, for instance, if in the past your townhouse appraised for $300,000, where the structure was valued at $225,000 and the land at $75,000, then your structure was worth 75% of your townhome’s value (or $225,000/$300,000 = 0.75). Now, if per the real estate websites, you find your townhome is currently worth $500,000, you can estimate the structure to be valued at $375,000 (or $500,000 x 0.75 = $375,000). Of course, the above does not take into consideration deprecation, or any upgrades or remodeling you may have performed. If you still need help determining how much dwelling coverage you need, you can ask your agent for help while you are you are comparing quotes.

Next, you will want to estimate the amount of property coverage you will need. To do so, it is recommended that you create an itemized list, ideally in a spreadsheet, of all your belongings and how much they are worth. To make it easy, start with more expensive items, such as electronics, appliances, and furniture, then work your way down. You should be okay ballparking your lower value belongings as a single figure, such as $2,000 for miscellaneous items. Here, it is important to note that most standard townhouse insurance policies determine payouts for personal property factoring in deprecation. In other words, the actual cash value is used. For instance, if you bought a TV a few years ago for $1,500, but it is now worth only $800, you would only receive $800 if the TV was damaged by a peril. As optional coverage, you can upgrade your personal property coverage to use replacement cost instead, which does not count depreciation. With replacement cost, the payout would be the amount you originally paid or the amount to get something of equal value. Per last example, you would get the full $1,500.

For liability coverage, you will want to consider the value of your savings and investments, as these are assets that can be seized in the event you are at-fault if someone is injured or if you damage another’s property. Most standard townhouse insurance offers $100,000 to $500,000 in liability coverage.

Finally, be sure to assess your risks when purchasing townhouse insurance. Are there a lot of disasters where you live? Has there been an increase in crime? Having an idea of what perils and hazards are most likely to occur can help you decide on the best policy for your townhome.

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