Home Insurance: Condos, Homes, and Townhomes, Oh My!
The last year has shown us all just how important a home can be. It is so much more than a place to rest your head at night. Throughout 2020, our homes were transformed into our gyms, schools, offices and even our favorite date night spots with a little imagination. We also learned that homes look so different for everyone. So whether you live in a single family home, walkup apartment, condo, or townhome, you are always looking for the best way to protect your investment. So does it matter? Is all home insurance the same? Should it matter what type of home you live in or if you share walls with your neighbors? Read on to learn how you can protect your home based on its specific needs.
Single Family Homes
There are so many benefits to purchasing a single family home and many reasons that people choose this style of homes versus others. For one, you are less likely to have an HOA (homeowners association) which can dictate and regulate what you are allowed to do with your home. Some of the limitations can be in relation to fence height, paint colors, construction, landscaping and more. While it is not common it has happened where single family homes are under the umbrella of an HOA. When this happens, the HOA may have specifications for your insurance policy. Some things may be covered by your HOA while others are the owner’s responsibility. These would include external fence line, roof, gutters, drains, etc.
However, if your home is not within an HOA community, you will be responsible for insuring the entirety of the home yourself. This is a big reason why people stray away from HOAs and prefer the freedom to choose and hand pick their policy to fit their needs. Single family homes do require slightly more responsibility than a condo, townhome or apartment would, so keep that in mind. When insuring your home, think about the property on all sides of your home, any potential damage (flood zones, earthquakes, fire, wind and even theft). Homes without an HOA typically do not have any additional security or external coverage.
So you have chosen a condo as your home purchase. Great! Here is what you need to know. The difference between a condo and a townhome is that in a condo your home typically has some overlapping of floors, staircases and shared walls. This is a big difference when it comes to insurance and the responsibilities of the owner. Your condo may come with a homeowners insurance policy that you can purchase specifically for your type of property. Some condos are stacked on top of one another while others just share a staircase. This would change the type of insurance you would be required to have based on natural disasters and your specific risk to exposure.
Your condo insurance will also depend on how your lot is set up. Some condos have balconies, some have small backyards and others have no outdoor space at all. Typically, the HOA fee that is collected will include insurance for all external spaces. This means that the condo owner will only be responsible for the interior of the home as well as the contents of the interior. It is important to review your policy to see what is included in the coverage through the HOA. You may have fences, gutters, roofing, solar panels, railings, cement etc. Always review the policy just in case you want to add to your policy to meet your needs.
So now that we have discussed single family homes and condos, let's take a look at townhomes. How are townhomes different from condos? Usually a townhome is differentiated by a few characteristics. In a townhome, you will only share side walls with a neighbor. You will never be above or below your neighbors. This provides a far more individual home ownership style and gets owners closer to the feel of a single family home. However, this could lead to more coverage that is the responsibility of the homeowner. The majority of townhomes in the US are run through an HOA, similar to condos, the HOA agreement will determine what your insurance policy is and if the homeowner needs to seek additional external coverage. It is, however, the same as a condo and single family home when considering the inside of the home. Townhomes usually have a backyard or porch and require insurance on all outdoor spaces.
The biggest takeaway here is that no two homes are the same and that every owner should research their coverage and adjust their policy accordingly. Make sure that you set yourself up for homeownership success and take the correct steps in insuring your home. Use Insuravita to help you find the policy that is built for your home!