What Are The Different Home Insurance Coverages for Different Homes?

a couple talking about their home insurance

One of the things that people have to decide when they’re buying a home is if they want a single-family home, which is a freestanding home usually with a yard –  anywhere from a small yard to a massive yard to acre –  or do they want to live in a townhome or condo-type situation where they’re right next to and connected to the people living next to them.


People are never quite sure about what is the difference in the coverage and the cost when you’re looking at buying a single-family home versus perhaps a townhome or a condo? This question is being asked more and more in Middle Tennessee with so many more condos rising in the area. 

Difference Between Single-Family and Townhome or Condo Insurance Coverages

Single Family Insurance Coverage

When you buy a single-family home in a neighborhood, for example, the owner (the occupant) is going to be responsible for the entire structure. They’re going to be responsible for everything that constitutes that home.

When you have a single-family home that you own in a neighborhood, you’re responsible for everything that happens on that property. With a single-family home, you’re responsible for rebuilding everything from the ground back up again. In a townhome or a condo, you’re responsible for what happens on the inside. The HOA or whoever has the master policy will be the one to take care of any damage or rebuilding of the outside (the roof, the frame, the exterior elements) and then you’re going to rebuild from the studs in usually. 

Townhome or Condo Insurance Coverage

When you’re looking at a townhouse or you’re looking at a condominium, the owner-occupant is not responsible for the whole building. They’re only responsible for their unit. The unit consists of everything from the studs. Anything that’s really at the heart of the structure of the building is the responsibility of the building owner or the association.

When you have a condo, you will usually only worry about the dwelling coverage.

Typically for townhomes and condos, what they will do is when they’re rebuilding that structure, they will run electricity and wiring to the wall. It’s the owner’s responsibility to run that electricity and water to the faucets or the outlets or the water machine. The association handles all the grounds around the building and the outside of the building.


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Is single-family home insurance more expensive than townhome or condo insurance?

The result is that condominium and townhome coverage is less expensive than single-family home coverage by and large but that will depend on location and if you’ve owned a condo or it is a townhome and it will depend on what finishing and upgrades it contains -it is pretty standard materials used or are there upgrades like marble and upgraded flooring etc. 

In Middle Tennessee right now, we also have to factor in the cost of finding somebody to rebuild because there’s so much construction going on. That’s one of the things Kevin explains to our policyholders is that if you have a dwelling code, whether it’s a condo or a single-family and you haven’t taken the square footage and multiplied that times $150 to $200 a square foot, which is what it will cost to rebuild a single-family home for example, then you probably don’t have enough coverage and that fluctuates by the market and so that’s one of the biggest drivers of the cost.

If you’re in the Gulch, your condo policy may very well cost just as much as somebody that has a home in Smyrna because the cost is going to be about the same to replace what’s inside that wall.


Thinking of purchasing a home in Nashville and Middle Tennessee? Don’t hesitate to ask questions and make sure that you understand and think about when you’re factoring in what it is that you want to purchase.

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