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Do You Own a Townhome? If so, you may be over-insured!

In Florida, a townhome is either insured as a single-family home (through an HO3 policy), or as a condominium (an HO6). The type of property insurance you need is dependent on how your community is insured as a whole. For example, if your bylaws state that your HOA covers roof replacement, it is likely you will only need to purchase condo insurance, or a "walls-in" HO6 policy to cover your personal property and items within the unit itself like walls and fixtures. Personal liability is also included in an HO6 policy, so if a friend or visitor gets hurt on your property, you'll have protection against lawsuits and legal expenses. The cost of lodging and transportation in the event of loss of use is also included in an HO6 policy.

If your community bylaws state that the homeowner is responsible for replacing their own roof, you'll need to secure a full HO3 policy - that is - one that provides the same coverage a stand-alone, single family home would require. Roof included.

Typically, when a client is purchasing a townhome, they will call a few different local insurance agencies to get quotes. The problem is, some agents automatically quote townhomes with HO3 insurance, assuming it will require a full single family home policy. As the home buyer, you may just assume the quote you are being given is accurate for your property and you may sign on for a policy you don't actually need. You will then be "over insured," meaning you may be paying for coverage that your townhome community HOA is already paying for!

It's definitely worth the potential of significant savings to double-check your current policy. If you're not exactly sure what you're looking for, just give us a call. We'll be happy to let you know what type of coverage you should have.

Another factor to consider is that certain insurance companies will only insure Townhomes as an HO3, even if the community insurance covers the entire building, such as the roof. This is also something we can help guide you through.

And a final note about townhomes. Regardless of how your community is insured, you'll want to consider an inexpensive flood policy, considering all townhomes are based on the ground floor. Even in an "X" flood zone, water damage in a storm-prone state like Florida is very likely (did you know that over 40% of flood insurance claims come from "X" flood zone homes?). With hurricane season upon us - and knowing there is a 30-day wait for flood insurance to take effect - we'd strongly suggest asking for a flood quote when you call in to verify your townhome coverage. And if your townhome is over-insured, we may be able to take your newly-realized savings and add flood coverage to your property! That's what we call a win-win!

If you have any questions about your townhome's insurance coverage, or anything tied to home, flood or auto insurance, please don't hesitate to give us a call anytime at 321-725-1440 or email team [at] wreninsuranceagency [dot] com. We'd love to help!