Townhome association property insurance
Insures a townhome association's buildings or common elements after a covered loss; whether it reaches the attached homes depends on how the development was recorded, condominium or PUD.
Why Coverwatch
- Markets
- Community-association and habitational programs for attached construction, plus surplus lines for older, wildfire, or loss-heavy projects a standard carrier declines, quoted on the recorded model.
- Competition
- 60+ carriers compared on whether the master insures the buildings or only the common elements, on the insured value, and on the deductible, not just premium.
- Lender paperwork
- We answer the condo-versus-PUD project questionnaire the way the recorded declaration reads, so a lender classifies the project correctly and a unit sale does not stall.
For hoa
- What it covers
- The buildings and common elements the association must insure: the whole structure on a condominium-recorded townhome, only the common property on a PUD-recorded one.
- What it doesn't
- On a PUD, the attached homes each owner insures under an HO-3, plus the master deductible passed to owners.
Trusted by 60+ carrier partners
What does townhome association property insurance cover?
Townhome association property insurance covers the buildings or common elements an association owns after a covered loss. Whether it insures the attached homes depends on how the project was recorded: a condominium-form townhome carries a walls-in master policy on the buildings, while a fee-simple PUD leaves each owner to insure their own.
Why recorded ownership controls townhome association property coverage
Townhome is an architectural style, a home attached to its neighbors in a row, not a form of ownership.
Condominium-form versus PUD-form is the whole question
Recorded as a condominium, the association carries a master policy on the buildings like a stacked condo.
Party walls put one loss on two owners
A recorded party-wall agreement assigns who repairs and insures the shared structural wall, so a fire or water loss that damages it crosses an ownership line.
Attached construction concentrates fire severity
Fire travels along a shared attic or roof deck down the row before it is contained, so a single ignition can damage several homes at once.
How we get you covered
We take commercial property for hoa to 60+ markets, build it to fit your contracts, and keep your certificates compliant.
Read your risk
We map what could actually go wrong in your operation, where a claim would come from, and who would bring it.
Shop 60+ markets
We take your risk to the carriers that know your class and make them compete on price and terms.
Build the endorsements
We add the endorsement wording that decides whether the policy responds to a claim, beyond the base form.
Keep you compliant
We handle the COIs, additional-insured certs, and renewals, so you are never the one chasing paperwork.
What's covered, and what isn't
In the policy
Buildings, per the recorded ownership model
On a condominium-recorded townhome the master insures the attached buildings, roofs, and exterior walls, typically on a walls-in form.
Common elements the association owns
Private roads, entry gates, fences, retaining and perimeter walls, pool houses, and landscaped common areas are the association's property under both models.
Shared roof and utility runs across a row
A continuous roof deck or a shared water, sewer, or electrical run serving a whole row is a maintenance and insurance question the governing documents assign.
Increased cost of a code-compliant rebuild
Ordinance-or-law coverage pays the added cost of rebuilding to current building, fire, and energy code after a covered loss.
Loss of assessment income and debris removal
After a covered loss the policy replaces the assessment income the association loses while common property is unusable.
Not in the policy
The attached homes on a PUD-recorded project
When the townhomes are recorded fee-simple, each owner holds title to their own attached home and its interior, so the structures are not on the master at all.
Covered by each owner's HO-3 policy
The master deductible passed to owners
When the board special-assesses to fund the master deductible or a loss above the limit, an owner's share is not paid by the master itself.
Covered by loss assessment coverage on the owner's policy
Injury to residents and guests on common areas
A slip on a private road, a pool injury, or a trip on a shared walkway is a bodily-injury claim, not physical damage to a building.
Covered by General Liability
Board decisions and covenant disputes
A suit over a rejected architectural request, a covenant-enforcement fight, or a wrongful board decision is a management-liability claim.
Covered by Directors & Officers
Theft of association funds and employee dishonesty
A manager or board member diverting reserves or dues is a fidelity loss, not property damage.
Covered by Crime & Fidelity
Earthquake and flood
Standard property forms exclude shake and rising water.
Covered by Earthquake / flood policy
Claims commercial property pays
The same attached-row loss lands in a different place depending on how the project was recorded, what the party-wall agreement assigns, and the age of the row. These are the property claims townhome associations actually face, with the typical cost to repair each.
Fire spreading down a row of attached homes
A fire travels along the shared attic or roof deck, damaging three or four attached homes before it is contained.
$250K–$5M+
Party-wall dispute after a cross-boundary loss
Water or fire damages the party wall between two attached homes, and the loss crosses an ownership line, so the fight is over who insures the shared structure.
$25K–$500K+
Shared roof loss across attached units
A storm strips a continuous roof deck serving a whole row.
$100K–$2M+
Ordinance-or-law rebuild gap on an older row
A covered fire damages part of an older row, and the city requires the rebuild to meet current fire-separation, electrical, and energy codes.
$100K–$3M+
Ranges are typical repair and settlement bands for these claim types, not a quote. Actual exposure depends on the recorded ownership model, construction, row length, building age, insured value, and the party-wall agreement.
What hoa buyers are required to carry
The limits contracts and statutes set for this line, and what moves your premium and terms.
- Fannie Mae (condo-recorded)
- 100% replacement cost, deductible ≤ $50,000
- Fannie Mae (PUD-recorded)
- Owner HO-3, or master if the docs require it
- Lender project questionnaire
- Condo vs PUD classification
- Governing documents
- Coverage per the CC&Rs and party-wall agreement
A condominium-recorded townhome must carry a master insuring 100% of insurable replacement cost, with the single-occurrence deductible capped at $50,000 per unit under Lender Letter LL-2026-03, effective for loans applied on or after July 1, 2026. A shortfall makes units non-warrantable.
For a fee-simple PUD, Fannie Mae looks to each owner's dwelling policy, not a master. It accepts a master on the residential structures only if the recorded documents require one; otherwise the owner's HO-3 satisfies the lender.
A lender classifies the project from the recorded declaration, and the property questions differ by model. Answering the questionnaire the way the declaration reads keeps a townhome unit from being misclassified and stalling at closing.
The recorded declaration, CC&Rs, and any party-wall agreement dictate what the association must insure and where each owner's policy takes over. The board can be liable for failing to carry the coverage the documents promise.
- Recorded model and insured value
- A condominium-recorded townhome insures whole buildings and rates on their full replacement cost.
- Construction, row length, and roof
- Frame versus joisted-masonry construction rates very differently, and the length of each attached row drives fire-spread severity and the insured value.
- Loss history and fire-separation quality
- Multi-year loss runs set the rate and the deductible, and carriers weight fire separation between attached units heavily because it decides whether one…
- Wind, wildfire, and catastrophe exposure
- Coastal, high-wind, and wildfire-exposed rows pay more and carry percentage catastrophe deductibles.
Endorsements that close the gaps
The base form is the start. These add-ons are where the policy gets built to fit hoa.
Ordinance or law coverage
Splits into loss to the undamaged portion a code officer condemns (Coverage A), demolition (Coverage B).
Agreed value
Waives the coinsurance clause when the carrier and association agree the insured value up front.
Blanket building limit
Applies one shared limit across every building in the row instead of a separate scheduled figure per building.
Equipment breakdown
Covers sudden mechanical or electrical failure of shared boilers, pumps, gates, and central HVAC, which standard property forms exclude.
By the numbers
The project-classification rules, party-wall doctrine, and lender floors that surface when a townhome association gets its property program quoted or answers a lender's condo-versus-PUD questionnaire.
- PUD vs condominium project classification
- Master vs individual owner policy
- Party-wall insurance rule
- Duty to repair carries the duty to insure
- Townhome interior responsibility
- Shifts to the owner faster than a condo
- Fannie Mae master-deductible cap (condo-form)
- $50,000 per occurrence, per unit
- Ordinance-or-law requirement
- Coverage A and Coverage C required
Fannie Mae requires a master property policy on condominium-recorded projects, but for a fee-simple PUD it looks to each owner's dwelling policy and accepts a master on residential structures only if the recorded documents require one.
As a general rule, the party responsible for maintaining or repairing a portion of a shared party wall also insures it, and a recorded party-wall agreement, binding on future owners, assigns that responsibility and how repair costs split.
In townhome communities the association typically insures exterior elements such as siding, roofs, and shared fences, while interior responsibility falls to the owner sooner than in a condo, picked up by the owner's HO-6 or HO-3.
For a condominium-recorded townhome, Lender Letter LL-2026-03, effective for loans applied on or after July 1, 2026, caps the master deductible at $50,000 per occurrence, per unit, and requires 100% of insurable replacement cost, replacing the prior 5% rule.
On a condominium-recorded project Fannie Mae requires the master to carry building ordinance-or-law coverage including Coverage A and Coverage C, the parts that pay to rebuild an older row to current code after a loss.
Common questions
about commercial property for hoa insurance
It depends on how the development was recorded, not how the homes look. Recorded as a condominium, the association carries a walls-in master on the buildings and each owner holds an HO-6 for interiors. Recorded as a fee-simple PUD, each owner insures their attached home under an HO-3 and the association insures only common property. The recorded declaration and CC&Rs are the only reliable way to know which model applies.
Two legal ways to record the same buildings, producing opposite insurance structures. Condominium-form is recorded under the state condominium act: owners hold title to their unit plus a share of common elements, and the master insures the buildings. PUD-form, or fee-simple, gives each owner title to their lot and attached home, with the association owning only common areas. So the master is primary building coverage on condominium-form, and the owner's dwelling policy on PUD-form.
A party wall is the shared structural wall between two attached townhomes, and a party-wall agreement is a recorded document assigning who maintains, repairs, and insures it. The rule: whoever maintains a portion also insures it, because a loss to the wall crosses an ownership line. On a PUD-form townhome the agreement tells two HO-3 carriers how to split the shared-wall repair, and when it does not line up with the owners' policies, the claim stalls.
Because attached homes share structure, a fire does not stop where it starts. It travels along a continuous roof deck, shared attic, or party wall, so one ignition can damage several homes at once, a severity concentration detached construction lacks. So the insured value and master limit must reflect a multi-home loss, and carriers weight the fire separation between units heavily: a code-compliant fire wall is often the only thing stopping a whole-row loss.
On a condominium-recorded townhome the master deductible is the association's responsibility, funded from reserves or a special assessment, as in a stacked condo. When the board assesses to fund it, each owner's share falls to the loss-assessment grant on their HO-6, set at only about $1,000 unless bought up. On a PUD-recorded townhome the master covers only common elements, so its deductible touches common-area losses and each owner's HO-3 deductible governs their dwelling.
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