What Are You Responsible for Insuring in a Townhouse?
Usually everything from your walls in, plus belongings and upgrades. Your HOA's governing documents set the exact line.
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Your HOA's governing documents, not your gut, draw the line between the master policy and yours. Most townhome associations cover the building's exterior, roof and shared structures, leaving you to insure the drywall, flooring, cabinets, fixtures and any upgrades inside your unit. That's what an HO-6 policy handles. It also covers your belongings and liability, and pays living expenses if the unit becomes unlivable after a covered loss. Check the declarations in your HOA documents to see exactly where the association's responsibility stops.
Check what your unit actually needs covered
A townhome HO-6 priced too low can leave rebuilding costs, upgrades, and a loss assessment bill uncovered. Compare quotes built around your HOA's actual coverage line, not a generic estimate.
What happens when water or fire damage spreads between units
Water does not respect the line in your HOA's governing documents. If a pipe bursts in the unit above and ruins your ceiling and flooring, your HO-6 policy is usually what pays for your interior repairs and belongings, even though the leak started elsewhere. Your insurer may then try to recover that cost from the neighbor's insurer, a process called subrogation, but that happens between the companies. You file your claim, pay your deductible, and get your unit fixed without waiting on that outcome.
It works the same in reverse. If your washing machine hose fails and water runs into the unit below, your liability coverage is what responds to the damage you caused to your neighbor's space and belongings. This is one reason the liability portion of an HO-6 matters as much as the dwelling and contents parts, even though people tend to focus on the latter two.
Loss assessment coverage handles a different kind of bill. If a covered loss damages shared property, like the roof, a stairwell, or the building's exterior, and the master policy does not fully cover the repair, the HOA can pass the shortfall to owners as a special assessment. An HO-6 policy typically includes a set amount of loss assessment coverage, often a flat figure like $1,000 or $5,000, and it can usually be raised for a modest added cost. Given that a special assessment after a major loss can run into the thousands per unit, it's worth checking the limit on your policy against what a real shortfall could look like for a building your size.
The amount of coverage a unit needs comes down to two numbers worth checking directly rather than guessing. The first is what it would cost to rebuild your unit's interior, walls-in, including any upgrades like renovated kitchens or custom flooring, since a standard HO-6 limit set by a template doesn't know about your remodel. The second is the loss assessment limit, checked against the size and age of the building and how much of a gap the master policy tends to leave. Both numbers come from your HOA's master policy and your own unit's condition, not from a one-size estimate, so pulling the HOA's coverage summary before setting your own limits saves a correction later.
What the master policy's deductible has to do with your bill
Master policies carry their own deductible, and HOAs often pass that cost down to owners when a shared-property claim gets paid. If the building's roof is damaged in a storm and the association files a claim, the master policy might have a $10,000 or $25,000 deductible before it pays anything. That amount frequently gets divided among units or billed to whoever caused the damage, and it shows up as another kind of assessment separate from the loss assessment described above. Some HO-6 policies offer a coverage option specifically for this, sometimes called loss assessment deductible coverage, and it is worth asking whether the policy includes it or whether it needs to be added.
Townhomes also differ from single-family homes in how the exterior gets insured at all. In a detached house, one policy covers the whole structure, inside and out. In a townhome, the HOA's master policy usually insures the roof, siding, foundation, and shared walls, while the owner's HO-6 covers everything inside the unit's own walls. The split means two different insurers could be involved if a single storm damages both the roof and the ceiling below it, and each company looks only at the piece its policy covers. Reading the HOA's master policy declarations, not just the bylaws, is the only way to know exactly where that line sits for a specific building.
Some master policies are written as all-in, meaning they cover the interior finishes of every unit as they existed when the building was built, not just the bare structure. Others are bare-walls policies, covering only the studs and leaving drywall, flooring, and fixtures to the owner. An HO-6 bought without knowing which type applies can end up overlapping coverage already paid for in HOA dues, or leaving a real gap uninsured. The HOA's master policy summary, usually available from the association's management company, states which type it is, and that answer should shape how the HO-6 is set up.
Renters in a townhome unit face a simpler version of this question. They don't need to insure the structure at all, since both the master policy and the owner's HO-6 dwelling coverage handle that. A renter's HO-4 policy covers belongings, liability, and loss of use, without any of the walls-in dwelling coverage an owner carries. Anyone renting a townhome should confirm with the landlord or property manager that dwelling coverage already exists elsewhere, since an HO-4 is not built to cover structural repairs.
One document settles most of this
Pull the HOA's master policy summary. Check whether it's all-in or bare-walls, and check the loss assessment deductible. Those two answers decide how much HO-6 coverage your unit actually needs.
