Is a town home a house, a condo or something else? Since we’re discussing it from an insurance standpoint (we’ll ignore the real estate perspective), town homes can be viewed as;
- A single family home (yes, even if it’s connected on both sides to neighbors)
- It can also be viewed as a condo
What makes the difference really depends on how two questions are answered.
- Does the homeowners association have an insurance policy that covers more than common areas (sidewalks, parking areas, etc.) and general liability?
- Who’s responsible for the outside walls, roof & foundation?
The policy of most town homes we wrote insurance for, about 5 plus years ago, would have been the same as what we would have written on a single family home. That means the policy on the home would have covered;
- The home’s exterior walls, roof & foundation (provided that coverage was available)
- The interior finish out
- The owner’s personal property
It would have covered everything the same as a standard Texas home policy. There may have been a home owners association, but there was no common insurance policy that covered the buildings at large.
In the last 5 years, town homes have grown more popular and are found in both suburban and urban areas. Builders are even building planned communities of town homes. More and more have a mandatory HOA, and these HOA’s have begun to obtain their own insurance policies. This helps ensure the exterior of all the homes are kept up to a common standard (roofs are replaced when damaged by hail, etc.). The HOA policies usually cover;
- The roof & building’s exterior façade
- The building’s structure (framework, wiring & plumbing)
- The foundation
- All common areas (sidewalks, parking, clubhouses, etc.)
In these cases, the town home is insured with a condo policy which covers from the sheetrock in. That means we’re focusing on what it would cost to replace the interior of the home including;
- Sheet rock, paneling, mill work
- Flooring (wood floors, tile, carpet, etc.)
- Plumbing, lighting & electrical fixtures
- All personal property
For more information refer to our blog. We confirm what coverage is needed with the mortgage company, as well as with the property manager or home owner’s association representative. Getting the right coverage up front helps us insure our clients only for what they are responsible for and not pay for coverage that’s not needed.
Have a question about town home insurance or want to share your experience? Post your comments or questions on our Facebook page or in the comments section below.