The deed and the declaration pick the form: a fee-simple townhouse takes a standard homeowners policy on the whole structure, a townhouse held as a condominium takes a unit-owners policy on the interior with loss assessment coverage, and a fee-simple one whose association insures the roof takes the unit-owners form too.
Quoting a townhouse goes wrong when the underwriter is told the wrong thing about what you own. Give them a detached-house description of a condominium unit and you pay twice for a roof the association already insures; give them a unit-owners description of a fee-simple townhouse and the structure you are responsible for is uninsured. The declaration answers it, and every carrier will ask for the association's insurance summary anyway, so getting it first saves a round trip.
The three cases, and which form each takes
Case one, a fee-simple townhouse where the owner maintains the whole building: a standard homeowners policy, the same form a detached house takes, covering the dwelling to its replacement cost, other structures, contents, loss of use and liability. Nothing about the shared wall changes the form.
Case two, a townhouse held as a condominium: a unit-owners policy. It covers the interior as the declaration defines it, contents, liability, loss of use, and loss assessment coverage for your share of a bill the association levies after a loss. The association's master policy covers the building itself under NRS 116.3113.
Case three, a fee-simple townhouse whose declaration puts the roof and exterior on the association: this is common and it is the one people get wrong. The lot is yours but the structure is insured collectively, so the right answer is usually a unit-owners policy or a homeowners policy endorsed to walls-in coverage. Ask the carrier explicitly rather than letting the deed decide the form on its own.
What to ask the association before you quote
The resale package includes an insurance summary, and if you have not received it yet the management company will usually provide the certificate on request. Five questions decide your policy.
- Does the master policy cover the building bare walls, single entity, or all-in? That is the line between what it insures and what yours has to.
- What is the master policy's deductible, and is it per building or per occurrence? Deductibles on attached projects have risen sharply, and a large one is what loss assessment coverage exists to absorb.
- Can the association assess owners for the deductible after a loss? Most declarations allow it, which is why loss assessment limits of $1,000 are usually too low.
- Does the master policy cover the roof and the exterior of my building, or only common areas away from it?
- Is there an open claim, a lapse, or a carrier non-renewal? Any of the three affects financeability as well as your own premium.
The party wall and the shared roof
A fire or a burst pipe in an attached building does not respect the property line, and the recovery is a negotiation between two policies plus possibly the association's. Where the wall is a true party wall, each owner insures their own side and the declaration or a recorded party wall agreement allocates the repair. Where the roof runs continuously over several units, ask which policy responds to a leak that starts over your neighbour and ends over you.
Two practical points. Water damage originating in a neighbour's unit is one of the most common attached-home claims, and your own policy is usually the one that pays first while subrogation sorts out the rest. And the age of the roof drives the premium and sometimes the availability, so on a fee-simple townhouse ask for the roof's age before the inspection, not after.
What the lender requires, and when
The lender needs evidence of insurance before closing, and on an attached home it needs the association's master certificate as well. On a condominium unit it will check that the master policy covers the building to the standard the agencies require, and a project whose insurance falls short can hold up a loan on a unit that is otherwise fine.
Quote it during the inspection period. Two things can surface there that are better known before your contingencies expire: a master policy deductible large enough to need a serious loss assessment limit, and a project a carrier will not write at all. Both are answers you want while you can still walk.
Questions people ask
Do you need homeowners insurance if the HOA has a master policy?
Yes. A master policy covers the building to whatever standard the declaration sets and never covers your contents, your liability, your loss of use, or an assessment levied against you after a loss. Every lender requires an owner policy alongside it.
How much loss assessment coverage should you carry?
Enough to absorb your share of the association's deductible after a large loss. The $1,000 that comes standard on many policies is usually too low where the master deductible runs into six figures, and raising the limit is normally inexpensive.
Is townhouse insurance cheaper than house insurance?
Usually somewhat, because the building is smaller and, where the association insures the structure, your policy covers less of it. Against that, attached construction can raise the fire rating and you now carry loss assessment exposure the detached owner does not.