August 16, 2018
Condo vs. Townhome Insurance — What’s the Difference?
Condo vs. Townhome Insurance — What’s the Difference?
By LLCR Staff

When it comes to examining property insurance, the good news is that both condo and townhome insurance tend to run less expensive than single-family home insurance. However, it is important for any potential buyer to understand condo vs. townhome insurance.

Types of Coverage You’ll Need in a Condo

The key distinction between condo and townhome insurance comes down to the areas each property owner is responsible for.

While townhome owners need to provide coverage for the interior and exterior of their property, condominium owners claim responsibility for the interior of their unit, while HOA covers the exterior.

If you are considering purchasing a condominium, the good news is that condo associations take some of the insurance burden off the owners by providing partial coverage. However, condo owners still need additional protection through individual homeowners insurance policies.

Before determining what coverage a condo owner needs, it is critical to first examine the condo association’s policy found in the HOA’s declaration pages.

Often condominium HOA insurance policies will cover the common areas and most of the building’s exterior.  However, individual owners are responsible for the inside of their unit.

Individual condo insurance, known as HO-6 insurance, covers the interior of each condo unit, the condo owners’ possessions, and provides the owner with a liability policy.

The average cost of a homeowner’s insurance policy for an Illinois condo runs approximately $365 per year or $30 per month, which is relatively low compared to the rest of the country.

Types of Coverage You’ll Need in a Townhome

Townhome insurance, known as HO-3,  generally works the same as insuring a detached single-family home.

The insurance policy covers the unit as well as any outdoor space the owner has title to. This outdoor space includes the yard and any patio or balcony that the townhome may offer.

HO-3 covers fire damage and some storm damage, however flood and earthquake insurance are both optional coverage the homeowner may chose to add.

Similarly to condo homeowner associations, townhome HOAs cover any common space that residents have access to.

The price for townhome insurance can vary dramatically depending on which coverage the resident choses to include in their policy.

Which Type of Insurance is More Expensive

Townhome insurance coverage tends to cost more than condo insurance because it is more expansive.  A townhome owner has more ownership than a condo owner, since they have title to the interior and exterior of the unit, therefore they have greater risk associated with their property.

However, depending on individual insurance plans, it is important that prices may vary drastically.

Before choosing your perfect property make sure you take the insurance costs into consideration so that you can budget accordingly.

Understanding condo vs. townhome insurance can help you avoid potential discrepancies during your purchasing process.

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