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Townhome insurance is a type of home insurance policy. Unlike a condo owner, who typically owns only the interior of their unit, a townhome owner usually owns the entire structure of their home.
That means you may need an HO-3 or HO-5 homeowners insurance policy rather than an HO-6 condo insurance policy — though your homeowners association’s (HOA) master policy can dictate which coverage you need.
Mortgage lenders and HOAs typically require homeowners insurance. Townhome owners pay an average of $2,868 per year for a $300,000 dwelling policy with a $1,000 deductible.
Read on to learn what’s covered, what’s not, and how to get the best rate.
Townhome insurance isn’t a type of policy. Instead, you’ll typically choose either a standard homeowners insurance policy (HO-3) or a condo insurance policy (HO-6), depending on the structure of your HOA.
An HO-6 policy may be sufficient if your HOA has a master policy covering the exterior structure of your townhome. An HO-6 covers the interior of your unit, your personal property, liability, and loss of use.
If there’s no master policy, you’ll likely need an HO-3. This type of homeowners insurance policy covers the entire structure, your personal belongings, liability, and loss of use.
Townhome insurance isn’t legally required, but your mortgage lender will almost certainly require it, and your HOA may set minimum coverage levels. If you need HO-3 insurance, you’ll need dwelling coverage sufficient to cover the cost to rebuild the home.
If you rent a townhouse instead of owning it, you’ll need renters insurance. Your landlord may require it, but even if they don’t, renters insurance covers your personal belongings — not the structure itself.
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Coverage amounts and requirements can vary based on your policy, your HOA’s requirements, and the value of your home. Before buying a policy, it’s worth reviewing your HOA’s master policy to understand where its coverage ends and yours begins.
A master policy typically covers shared spaces, common areas, and the building’s exterior, while your personal policy covers your home’s interior, your personal property, liability, and loss of use. If there’s no master policy, you may need a standard homeowners policy that covers the structure of the home and its contents.
Keep in mind that all coverage is subject to your policy’s limits and deductible.
Coverage | Townhome Insurance | HOA Policy |
|---|---|---|
| Your home’s structure | ✔ Your home’s individual structure (HO-3, HO-5) ✗ (HO-6) | ✔ Shared walls, and roofs; sometimes also your home’s exterior |
| Your personal property | ✔ | ✗ |
| Liability coverage | ✔ | ✗ |
| Additional living expenses | ✔ | ✗ |
| Community amenities | ✗ | ✔ |
| Community spaces | ✗ | ✔ |
| Shared structures | ✗ | ✔ |
Here’s some more detail about your townhome’s specific coverage:
If a covered event, like a hailstorm or other natural disaster, damages your townhome, dwelling coverage helps pay for repairs. Dwelling coverage also protects other structures attached to your home, like your garage or deck. Notably, this protection doesn’t cover flood or earthquake damage.
Personal property coverage helps you replace belongings that are stolen or damaged in a covered event. This includes furniture, clothing, and electronics.
If someone sues you for property damage or bodily injuries, liability insurance helps pay for your legal defense, as well as medical expenses and repair costs.
Also known as loss of use coverage, additional living expenses coverage pays for hotel stays and restaurant meals if your home is temporarily uninhabitable after a covered loss.
No insurance policy covers everything, and townhome insurance is no exception. Standard policies typically exclude flood damage and earthquake damage, both of which require separate policies.
Townhome insurance also doesn’t cover normal wear and tear — damage that happens gradually over time rather than from a sudden covered event. And your personal policy won’t cover anything already covered under your HOA’s master policy, like shared walls, roofs, or common areas.
If you live in a flood-prone or earthquake-prone area, you may want to look into additional flood insurance or earthquake insurance to fill these gaps.
On average, townhome owners with an HO-3 policy that includes $300,000 in dwelling coverage pay $239 per month, according to Insurify data. But your actual rate will depend on several factors, including your location, the coverage limits you choose, your deductible, and how much your HOA’s master policy already covers.
Here’s a look at how average annual costs can vary by insurer, according to Insurify data, based on a policy with $300,000 in dwelling coverage and a $1,000 deductible.
Insurance Company | Average Cost Per Year |
|---|---|
| Allstate | $2,292 |
| Farmers | $2,232 |
| State Farm | $2,736 |
| USAA | $1,752 |
Whether you need townhome insurance (and which type) depends on whether you own or rent, and whether your townhome is part of an HOA.
If you own your townhouse, you’ll need a standard home insurance policy. While this isn’t a legal requirement for homeownership, mortgage lenders often require borrowers to carry this coverage. Even if you’ve paid off your townhouse, it’s still important to carry a townhouse insurance policy to protect your investment.
A standard homeowners insurance policy (HO-3) provides coverage for the structure of your home, your personal belongings, your personal liability, and additional living expenses.[3] This is the same type of coverage available for single-family homes.
If your townhouse is part of a homeowners, condo, or townhouse association, your HOA will have a master insurance policy that covers shared spaces and the building’s exterior. But you’ll need your own insurance policy to cover what the master policy doesn’t.
Your personal condo or homeowners insurance policy should include coverage for structures not covered in the master policy, your personal possessions, your personal liability, and additional living expenses.
Before buying insurance for your townhome, find out what your HOA’s insurance policy covers. The coverage from the master policy will influence what type of policy you need.
If you rent a townhouse, your landlord might require you to buy a renters insurance policy. Even if your landlord doesn’t require it, renters insurance is a cheap investment that helps protect your personal belongings.
A standard renters insurance policy covers your personal possessions, liability, and additional living expenses, but not the building’s structure.
Buying townhome insurance works much like buying any home insurance policy. You can get quotes by comparing rates on an insurance marketplace, working with an independent insurance agent, or contacting individual insurers directly.
Here’s how to get started:
Review your HOA master policy. If your townhome is part of an HOA, understanding what the master policy covers will help you identify exactly what your personal policy needs to include.
Determine your coverage needs. Based on the value of your home, your personal belongings, and any gaps in your HOA’s master policy, decide how much dwelling coverage (if necessary), personal property coverage, and liability protection you need.
Get multiple quotes and compare. Use a comparison tool, work with an independent agent, or contact insurers directly. As you shop around, make sure you’re comparing policies with similar coverage limits and deductibles.
Secure a policy. Review the policy details carefully before signing, and confirm it meets any requirements from your mortgage lender or HOA.
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Townhome insurance doesn’t have to be cost-prohibitive. Here are a few ways to find cheap home insurance without sacrificing the coverage you need.[4]
Compare quotes. Rates can vary significantly between insurers, so shopping around is one of the most effective ways to find a lower premium.
Bundle your policies. Many insurers offer insurance discounts when you bundle your townhome policy with another policy, like auto insurance or life insurance.
Raise your deductible. Choosing a higher deductible typically lowers your monthly premium. Just make sure you can comfortably cover the deductible amount out of pocket if you need to file a claim.
Ask about other discounts. Many insurers offer discounts for having a security system, sprinkler system, or smoke detector — or even for working remotely. It’s always worth asking about available discounts.
Review your HOA’s master policy. Knowing exactly what your HOA covers can help you avoid paying for unnecessary coverage in your personal policy.
Townhome insurance can get complicated, especially when HOA coverage is involved. Here are answers to some of the most common questions about insuring a townhome.
Most townhome owners need either an HO-3 homeowners insurance policy or an HO-6 condo insurance policy. Which one you need depends on whether your HOA’s master policy covers the exterior structure of your unit.
Parts of it, yes. Your HOA’s master policy typically covers the building’s exterior, roof, shared spaces, and common areas, like hallways and shared outdoor structures. It generally doesn’t cover your unit’s interior, your personal belongings, or your personal liability.
Sometimes. If your HOA’s master policy covers the exterior structure of your townhome, an HO-6 condo insurance policy may be appropriate. But if you’re responsible for insuring the full structure, you’ll likely need an HO-3 or HO-5 policy instead.
It can be. Townhomes tend to be less expensive than single-family homes, which can mean lower dwelling coverage needs and a lower premium. Your HOA’s master policy may also cover your home’s exterior, further reducing what you need to insure personally.
An HO-3 policy covers your home’s full structure, personal property, liability, and additional living expenses. An HO-6 policy provides walls-in coverage for condo and townhome owners, covering the interior of your unit but not the exterior structure.
Townhome owners with $300,000 in dwelling coverage pay an average of $2,868 per year, according to Insurify data. Your actual rate will vary based on location, coverage limits, and your deductible.
Yes, mortgage lenders typically require townhome owners to carry a homeowners insurance or condo insurance policy as a condition of the loan. Required coverage amounts vary by lender, so confirm the specifics before closing.
Insurify data scientists analyzed rates from more than 180 home insurance companies sourced directly from Insurify’s partner companies and Quadrant Information Services. Rates span all 50 states and Washington, D.C., and quote averages represent the mean price for a given coverage level and geographic area. To ensure data reliability, only insurers meeting minimum quote thresholds were included in the analysis.
Unless otherwise specified, quoted rates reflect the average cost for homeowners with no prior claims and good credit with a home construction year of 1980. The default coverage assumptions include:
Default Coverage Assumptions
Additional data points beyond these default values are sourced from Insurify’s proprietary database. Rates are updated monthly.
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)
)
)
)
)
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12+ years in personal finance and insurance writing
Former financial analyst
Licensed auto and home insurance agent
4+ years experience in insurance and personal finance editing
NPN: 20564519
Featured in
Licensed property and casualty insurance agent
10+ years editing experience
NPN: 20461358
Featured in
Data expert on auto trends and driver behavior
University of Chicago graduate with statistics degree
Featured in
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