House hunting comes with many considerations. Home insurance, specifically condo vs. townhouse insurance, remains a crucial area that potential buyers should be familiar with before committing to a purchase.
The Luxury Living team is here to walk you through the key differences between these types of property insurance and help you determine which property makes the most sense for you.
The Difference Between the Commonly Confused Terms
The primary distinction between condo vs. townhouse insurance comes down to the areas that a property owner is responsible for.
While townhome owners need to provide coverage for their property’s interior and exterior, condominium owners only claim responsibility for their unit’s interior. The condo’s homeowner association (HOA) covers the exterior.
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 because they have title to the unit’s interior and exterior. This means they also have greater risk associated with their property and a need for higher coverage.
However, depending on individual insurance plans, prices may vary drastically.
Common Considerations Between Both Types of Insurance
There are several factors to keep in mind as you compare condo vs. townhouse insurance.
If you are considering purchasing a condo, the good news is that associations take some of the insurance burdens 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, the buyer first must 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 each condo unit’s interior, the condo owners’ possessions, and provides the owner with a liability policy.
Townhouse 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 optional coverage the homeowner may choose to add.
Similarly to condo associations, townhome associations cover any common space that residents have access to.
The price for townhome insurance can vary dramatically depending on which coverage the resident chooses to include in their policy.
How LLCR Can Help you Find the Right Property for your Needs
Beyond property insurance, there are still other differences between condos and townhomes that are worth investigating.
The good news is that you don’t have to navigate the waters alone. Luxury Living Chicago Realty wants to help you walk through the house-hunting process and provide you with direct support from an experienced team member.
A licensed broker can streamline the journey of finding your dream home and help you examine essential considerations, including and beyond condo vs. townhouse insurance.