|Many people buying a townhome or condo are sometimes confused about making sure they have the proper homeowner's insurance policy to ensure they are fully covered.
Some homeowners receive notices from their mortgage company each year requesting an updated certificate of insurance (COI) for the Master Policy.
The HO-3 policy typically insures your home (including the structure) and any attached structures (like a garage or deck), as well as your belongings and your personal liability if you accidentally injure someone or damage their property (such as a toilet that leaks).
This type of insurance will usually provide double coverage along with the master, but the master insurance will be primary insurance in case there is a claim.
We have found that some homeowners purchase Renter's Insurance (HO-4) policies, which is very inaccurate and inefficient coverage.
Another type of coverage that is often purchased is an Interior/Betterments and Improvement policy (HO-6). This will only cover items that were upgraded and your interior personal contents, but usually not items that came with the house (windows, sliding doors, cabinets, countertops, ceiling fans, etc.), and usually does not provide further coverage if damage is caused to a neighboring unit.
When purchasing a townhome or condo, always double check the insurance requirements with the HOA's insurance agent.
The HOA's governing documents will state the type of insurance the HOA is supposed to carry, but there may be a difference in how your insurance agent interprets the wording and how the HOA's insurance agent interprets the wording. You don't want to be in a situation, where you do not have the proper coverage because your agent misunderstood the documents.