When it comes to residential dwellings in Canada, there are many different choices. These can range from single-family homes to apartments. Also, there are condo and town homes added to the living choices. No matter which one chooses to live in they should consider home insurance. This includes those who have chosen to live in a townhouse.

What is a Townhouse in Canada?

town house

A townhouse is one of many homes that are built in a row and are attached to each other. They are similar to attached homes. Except instead of just being two homes there are several that are attached. Meaning that there are attached homes on both sides of one residence with the exception of the end units.

What is the Difference Between a Townhouse and a Condo?

The townhouse owners have ownership of the small parcel of land that their townhouse resides on. A condo does not have any separate property ownership.

What is a Freehold Townhouse?

The freehold townhouse is where the owner also owns the small amount of land the house is situated on.

What is a Condo Townhouse?

condo

The owner does not own the property separately. They only own the house on the land. The land is owned by the condominium corporation.

How Does Insurance Apply to the Townhouse?

The insurance requirements and options will differ slightly between the freehold townhouse and the Condo Townhouse.

What Does Condo Townhouse Insurance Cover?

As a condo townhouse owner, you need to understand the type of home insurance coverage that is going to protect your ownership and personal belongings the best.

Condo Townhouse Corporation Insurance Coverage

The Condo townhouse corporation will be required to have insurance that covers the entire condo complex. Most condo townhouse owners want and need extra homeowner’s insurance. The condo insurance only covers the condo as it pertains to the condition it was as the result of the builder’s work. Also, it doesn’t cover the contents.

Extra Coverage

The condo townhouse owner is going to want extra coverage for;

  • Their Townhouse Upgrades

Most townhouse condo owners like to do their own upgrades. They may want to add new cupboards and counters, for example. Or, perhaps change the flooring. This can be expensive to do. It also increases the value of the townhouse. If a mishap occurred and a townhouse replacement was necessary it most likely would not include the cost of these upgrades. With the extra townhouse insurance these upgrades can be taken into account when the premiums are being determined.

  • Liability

It also makes sense for the condo townhouse owner to buy additional homeowner’s liability insurance. This way if an accident occurs in their townhouse they have the extra coverage if it becomes necessary.

  • Personal Belongings

In most cases, the condo townhouse owner provides their own furnishings. The condo insurance will not likely cover the contents of each townhouse. For this reason, the unit owners need to have enough homeowner’s insurance in place to cover these plus their other personal belongings.

Those that are buying extra insurance for their condo townhouse should inform the insurance company that this is for a condo unit. As there may be some variations in the policy. Compared to standard townhouse home insurance.

Buying Home Insurance for Freehold Townhouses

fire

Insurance Companies care about the type of house you have if you are going to ask them to provide homeowners insurance for it.

There may be some differences between the townhouse that the insurance company will take into account. For example, the townhouses are joined to the adjacent houses on either side of them. Unless they are an end unit. Which in this case they are only joined on one side.

The first step for buying home insurance for your townhouse is to know what it is going to cover.

You should have the option to buy the basic home insurance coverage. Most insurance companies will cover the same basics. This may include;

  • Perils

Acts of nature such as lightning, falling objects, windstorm, hail, snow, ice,  and sleet.

  • Fire
  • Falling objects

Aircraft or land vehicle impacts

  • Theft
  • Vandalism
  • Personal property also during transportation
  • Electricity
  • Liability coverage
  • Replacement value of the home
  • Detached structures

While these give a basic idea of what is covered, home insurance even for town homes can have some exclusions. Or there can be significant deductibles. Every townhouse insurance shopper should read over the proposed property carefully to see exactly what is covered and what is not with that particular policy.

The Extras

If a review of the policy indicates that there needs to be extra coverage then now is the time for the insurance shopper to buy the extras. Quite often people assume that because there is personal property coverage, it is going to cover everything the insured owns. This is quite often not the case. Some items that may not be covered but may be added on at an extra cost are;

  • Collectibles
  • Expensive items like furs or high-end media equipment
  • Jewellery
  • Art pieces

Common Insurance Coverage That Insured Will  Increase Premiums

Water Coverage

Although the basic home insurance allows for some types of water coverage for many, it is not enough. Some of the additional coverage that many opt for is;

  • Above Ground Water Damage

This will allow for extra coverage for roof damage that can be caused by various water issues. Such as ice damming. Or snow weight causing roof collapse. Another common occurrence is the backup of water from the eaves which can cause water damage.

  • Sewer Coverage

Extra coverage is often purchased for sewer back up and related problems. Overflow that backs up into a residence from septic tanks or storm drains.

These are just some examples of what may be available as extra covers. Also, what the extra coverage may cover;

Townhouse Coverage

Those that own townhouses have to be aware that damage could occur to the adjacent townhouses that are attached. The damage could be as a result of an occurrence that took place with an insured. Then it becomes debatable as to whose insurance is going to cover this. It can get complex.

By the insurance shopper knowing exactly what they are covered for they don’t have to second guess. When an event occurs, that involves the insurance company.

Resources

http://www.uppersiderealestate.com/freehold-versus-condominiums-townhomes-townhouses-real-estate.html
http://www.homelegalcost.com/insurance.asp
http://dumfriesmutual.com/choosing-insuring-detached-home-condo-townhouse/
https://www.cooperators.ca/en/insurance/home/home-insurance-basics/whats-covered.aspx
https://www.thinkinsure.ca/insurance-help-centre/theft-and-homeowners-insurance-coverage.html
https://www.tdinsurance.com/products-services/home-insurance/tips-advice/water-damage