Is Townhome Coverage HO3 or HO6?
It depends on ownership. You need HO3 if you own the structure, or HO6 if an association owns the exterior.
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Which one is actually yours
The policy type comes down to what sits on your deed and your association's bylaws, not what the building looks like from the street. If you own the exterior walls and the roof over your unit, even in a shared building, you need an HO3, the same policy a detached house uses, because you're responsible for insuring the whole structure. If the association owns the exterior and carries a master policy covering the building itself, you need an HO6, which covers the interior you own, from the drywall in, plus your belongings. Your purchase agreement or the association's governing documents will say which it is. If you're not sure, ask the seller's agent or the HOA for a copy of the master policy before closing, so your lender gets the right type of proof.
Getting this wrong costs you twice. An HO6 priced for interior-only coverage won't satisfy a lender who needs proof you're insuring the whole structure, and you'll be back at this before closing. An HO3 bought when the association already covers the exterior means paying for coverage you don't need. Confirming which one applies, then comparing quotes for that specific policy type, is what gets you a binder your lender accepts the first time.
What the master policy actually covers
Knowing you need an HO6 doesn't finish the job, because HOA master policies aren't all built the same way. Some cover just the bare walls, the studs and the roof structure, nothing inside the unit at all. Others cover the walls plus whatever came standard when the building was built, like the original flooring, cabinets, and fixtures. A bare walls policy leaves everything, including built-in fixtures, to your HO6. An all-in or single-entity policy leaves less for you to cover. You can't know which type your association carries without reading the master policy or asking the HOA directly.
The split affects one coverage in particular, called loss assessment coverage, and how much interior coverage you buy. If a shared roof needs replacing and the master policy's limit falls short, the HOA can bill every owner a special assessment to cover the gap. Loss assessment coverage on your HO6 pays your share of that bill, up to the limit you choose. Most HO6 policies include some amount by default, often modest, and you can usually raise it. Whether you need more depends on the size of the building, the age of the roof and systems, and how much the master policy carries, things the HOA's documents or board can tell you.
The other number to get right is called loss of use, or additional living expenses. It pays for a hotel and meals if the unit becomes unlivable after a covered loss. In a building with shared walls and shared systems, a pipe burst or fire in a neighboring unit can displace you even when the damage isn't yours. This coverage responds the same way it would in a detached house, but how long you might need it can run longer in a multi-unit building if repairs require coordinating with the association or waiting on shared systems to be fixed.
None of this changes which policy type you need. It changes what you ask for once you know. Before comparing quotes, get the master policy's declarations page or a summary from the HOA, and note whether it's bare walls or all-in, and what its own limits and deductible are. That page tells you how much interior coverage to request and whether the default loss assessment limit is enough. Bring it to the quote, not just the policy type, and the HO6 you end up with will actually fit the building you're buying into.
What if the building is still an HO3
Most townhomes with an HOA end up needing an HO6, but not all of them. Some associations exist only to maintain shared land, a private road or a clubhouse, and never take ownership of the buildings themselves. In that setup, each owner holds title to their whole unit, walls, roof and all, the same way a detached house works. The deed and the HOA's governing documents will say who owns the structure. If the association's documents don't mention a master policy covering the building, that's a sign you may need an HO3 even though you're paying dues.
People assume any HOA means shared ownership of the building. It doesn't. Dues can cover landscaping, a pool, and snow removal, with nothing about the roof over your head. Buying an HO6 in that situation gets you interior and contents coverage but nothing insuring the studs, the roof or the exterior walls, because no master policy exists to cover them. A lender asking for proof of dwelling coverage would reject that binder, and rightly so, since the whole structure would be uninsured.
The HOA's bylaws or covenants, often called CC&Rs, settle this question. They spell out what the association is responsible for maintaining and insuring, and what falls to the owner. If the document lists the roof, exterior walls and structure under the HOA's insurance obligations, you're looking at an HO6 situation. If it's silent on structural insurance and only covers common grounds or amenities, you likely need an HO3. When the wording is unclear, a call to the HOA's management company or board will settle it faster than guessing from the document alone.
Getting this confirmed before you request quotes saves a redo. Lenders want to see dwelling coverage matched to who actually insures the structure. A mismatch between your policy type and the HOA's real arrangement is one of the more common reasons a binder gets sent back. Ask for the CC&Rs alongside the master policy, if one exists, so there's no gap between what the HOA believes it covers and what your policy assumes it covers.
Before you request a quote
Pull the CC&Rs and the master policy, if there is one, and check who they say insures the roof and exterior walls. That answer tells you whether to ask for HO3 or HO6 quotes.
