Get a free, no obligation personal loan quote with rates as low as 6.99%
Get Started You can apply with no effect to your credit score

Having an insurance policy for your townhouse will ensure that you have adequate coverage in case the unexpected happens. Whether your belongings are stolen after your home has been broken into, your home is damaged from a natural disaster, or you’re liable after someone gets hurt while on your property, an insurance policy will help cover the financial repercussions. 

But exactly what type of insurance policy do you need for your townhouse? The answer will depend on what category your townhouse is under. Let’s go over the different insurance policies that are available to protect townhouses.

What Is A Townhouse?

A townhouse is a multi-level home that is attached to an adjacent home through shared walls and roof, and sometimes attached garages. Also known as “row houses”, townhouses are typically considered “freehold”, which means the owner owns the structure and land it sits on. The owner would also be entirely responsible for the maintenance and upkeep of the property, as well as for paying any associated property taxes

In the case of a freehold arrangement, the owner is also responsible for insuring the property.

There are also townhouse complexes that are classified as condominiums, which means the owner only owns a share of the condo corporation, and not any part of the land. In this case, the condo corporation governs what owners are allowed to do to their properties and is responsible for taking out an insurance policy to protect the building and common areas. 

Townhouse owners in a condominium arrangement can take out an insurance policy to protect their personal belongings, any improvements made following a renovation, or to cover unexpected events that may cause damage to your unit or another unit or injury to an individual inside your home. 

Square One insurance

What Type of Insurance Do You Need For A Townhouse?

The type of insurance required for a townhouse will depend on the classification of your home; namely, whether it’s considered freehold or a condominium. Your insurance policy will also depend on whether you own or rent your home. The following are types of insurance policies you may need to provide you with the appropriate coverage.

Renter’s Insurance 

If you’re renting your home, you may want to take out a renter’s insurance policy to protect your belongings. It also protects you against any liabilities and covers the cost of living expenses in the event that your home is uninhabitable. 

Homeowner’s Insurance

A homeowner’s insurance policy is meant to protect your home and the contents within it from theft, loss, or damage. The policy also covers damage to the interior and exterior of your home in the event of a natural disaster, theft, or vandalism. It may also help pay for any living expenses you incur if you’re temporarily unable to live in your home. 

If your townhouse is a freehold home, then a homeowner’s insurance policy would apply. 

Condo Insurance

Condo insurance covers the cost of any theft, loss, or damage done to the inside of your unit and storage locker. It also covers any liability on your part if someone gets hurt in your home. However, it does not cover the exterior of your home or any common areas, which are the responsibility of the condo corporation to cover. 

If your townhouse is a condominium, this is the type of insurance policy you’ll need

What Does Townhouse Insurance Cover?

A townhouse insurance policy typically includes the following:

  • Homeowner’s Insurance. If any part of your home’s interior or exterior is damaged, your homeowner’s insurance policy will cover the cost to repair or replace it. This includes interior and exterior walls, flooring, cabinetry, countertops, plumbing, electrical wiring, the roof, and the land that your townhouse sits on.
  • Personal Property. If any of your personal belongings are stolen, lost, or damaged, the personal property portion of your insurance policy will cover the loss up to a specific limit. This includes things like your appliances, furniture, electronics, and clothing, among others.
  • Third-Party Liability. If someone is injured on your property or their belongings are lost or damaged, the liability portion of your policy will cover any potential lawsuits, repair costs, or medical expenses.
  • Loss of Use. If your home becomes inhabitable after extensive damage is done, the loss of use portion of your insurance plan will cover the cost of temporary living arrangements, as well as any additional food expenses or mileage.

It’s important to understand that certain sources of damage may or may not be covered with your townhouse insurance policy. For instance, damage stemming from vandalism, theft, vehicles, wind, hail, lightning strikes, and fire are usually covered. But flooding from overland floods or sewer backup may not be covered. Unless you purchase additional coverage to add to your policy.

Townhouse Insurance FAQs

How do I know if I need condo or home insurance for my townhouse?

The answer to this question will depend on whether your townhouse is freehold or a condo. If you have not yet purchased the home, look for certain keywords in the listing for a townhouse. This includes “shared” or “communal”, which likely means the home is a condo.  Further, any listed condo fees will also be a giveaway that the home is a condo. In this case, a condo insurance policy would be applicable.  Otherwise, a listing that specifies “freehold” means you would own the home outright. In which case a homeowner’s insurance policy would apply. 

Can I get a detached townhouse?

No. A townhouse is defined as a home that shares at least one wall with another home. Conversely, a detached home does not share a wall with another property. 

Do I have to pay maintenance fees for townhouses?

If the townhouse is in a condominium complex with a condo board, then maintenance fees would have to be paid.

Is condo insurance cheaper?

Condo insurance policies are usually cheaper than insurance policies for detached homes. 

Final Thoughts

Regardless of whether your townhouse is freehold or condo, you should still have some form of insurance policy in place. That said, it’s important to understand exactly how your townhouse is classified in order to ensure you buy the right policy for your home. 

Lisa Rennie avatar on Loans Canada
Lisa Rennie

Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.

More From This Author

Special Offers

More From Our Experts

https://loanscanada.ca/wp-content/uploads/2023/09/GlobeMailTopCompanies2023-1.png
Loans Canada places No. 228 on The Globe and Mail’s fifth-annual ranking of Canada’s Top Growing Companies.

By Caitlin Wood, BA
Published on September 29, 2023

Loans Canada is excited to announce it has made it onto the Globe and Mail’s Top Growing Companies list for the second year in a row.

https://loanscanada.ca/wp-content/uploads/2023/09/Finder-Awards.png
Finder Awards Finalists: Personal Loans Customer Satisfaction Awards 2023

By Priyanka Correia, BComm

Loans Canada is happy to announce it received the finalist award in the Best Personal Loan Search Platform category.

https://loanscanada.ca/wp-content/uploads/2016/12/caution-1.jpg
Beware of Fraudulent Lenders Impersonating Loans Canada

By Caitlin Wood, BA

A note to our clients about fraudulent lending practices and illegal upfront fees.

https://loanscanada.ca/wp-content/uploads/2022/10/How-To-Pay-Your-Taxes-With-A-Credit-Card-Through.png
How To Pay Your Income Taxes With A Credit Card

By Lisa Rennie

If you’d like to pay your taxes using a credit card, you’ll need to use a third-party service provider like Plastiq or PaySimply.

https://loanscanada.ca/wp-content/uploads/2021/08/Climate-Action-Incentive-CAI-1.png
What Is The Canada Carbon Rebate (CCR)?

By Bryan Daly

The Climate Action Incentive Payment (CAIP), or Carbon Tax Rebate, is quarterly benefit paid to eligible Canadians in

https://loanscanada.ca/wp-content/uploads/2021/03/Canada-Workers-Benefit-CWB.png
Can You Claim The Canada Workers Benefit (CWB) In 2024?

By Bryan Daly

The Canada Workers Benefit is a refundable tax credit for individuals earning a low taxable income of $3,000 - $24,112.

https://loanscanada.ca/wp-content/uploads/2020/12/Student-Tax-Credits-and-Deductions.png
Student Tax Credits In Canada

By Chrissy Kapralos

Similar to how there are specific tax credits and deductions for businesses, seniors, and parents, there are student tax credits in Canada.

https://loanscanada.ca/wp-content/uploads/2021/04/Pay-Less-Taxes-Canada.png
How To Pay Fewer Taxes In Canada

By Bryan Daly

People are always trying to figure out how to save money on taxes in Canada. We present the best ways to legally pay less tax in Canada.

Recognized As One Of Canada's Top Growing Companies

Loans Canada, the country's original loan comparison platform, is proud to be recognized as one of Canada's fastest growing companies by The Globe and Mail!

Read More

Why choose Loans Canada?

Apply Once &
Get Multiple Offers
Save Time
And Money
Get Your Free
Credit Score
Free
Service
Expert Tips
And Advice
Exclusive
Offers

Build Credit For Just $10/Month

With KOHO's prepaid card you can build a better credit score for just $10/month.

Koho Prepaid Credit Card