The gaps between townhouse and condominium insurance policy deal with the way the properties are owned. A townhouse is legally different from a condominium in the way that the owners hold title to the land beneath their units. Typically, townhouse owners own the land under their units, while condo owners own the air space in their units and own the land together with the other condominium owners at the complex.
Townhouse Insurance
When a townhouse owner buys townhouse insurance, it covers the device and some other outdoor areas that the owner has the name to. This includes the exterior, interior, and some other patio or balcony areas. The policy covers fire damage and a storm damage. Flood or earthquake insurance is generally optional and needs a separate rider. Storm damage outside of flooding is almost always part of the general policy for townhouse owners. Unlike condominium owners, who don’t own the land under their units separately, townhouse owners need liability protection for injuries in their property, whether it’s indoors or outside.
Condominium Insurance
Condominium insurance for the buildings and the land on which the complex sits is carried by the condo association, not the individual condominium owner. The association buys a policy that the owners pay for both from the yearly, quarterly, or monthly association fees. The association must cover the buildings and all the common areas both for liability and replacement purposes. Individual condo owners need insurance policies that cover the insides of their units for smoke, fire, theft and liability, and potentially include different riders for expensive artwork, jewelry or musical instruments.
Liability Issues With Townhouses
Like condo associations, townhouse institutions must cover the common areas and public buildings with insurance. Since the units are independently insured, townhouse blanket policies might be less costly than condominium insurance policies. Regions that townhouse blanket policies cover are parking lots or garages, swimming pools, spas, other on-site amenities, paths and public areas.
Liability Issues With Condos
Liability policy in condominium units stops in front and back doors of the condominium units themselves. Since the condominium complex is owned by the owners, the association must offer insurance coverage on all the regions but the inside of the units.
Common Areas
Based on Mark Terry in Bankrate.com, some condominium and townhouse associations are electing to purchase insurance policies with deductibles. If a claim has been made, this deductible is spread around evenly to each of the owners, who could face a big expense they hadn’t counted on. Owners can ask their association members concerning the insurance policies they have for the complex to prevent surprises and to give input about the types of coverage they consider the complex needs.