You will want to talk to your realtor or to the HOA of the community that you are looking to purchase your townhome in for specific details on the type of policy you should carry. The easiest question to ask is if the association carries insurance that covers the exterior of the townhome. In that case you should only need to cover from the “studs of the walls in” (meaning from your interior walls in) and not the actual structure of the home. That type of policy is known as an HO-6 and covers your personal property, liability and specific improvements to the unit as well. The association may have a high deductible for their policy and may ask the community’s owners to carry a certain minimum amount of dwelling coverage as well so you will want to ask. See our frequently asked questions for more details on condo insurance.
If there is no blanket policy provided by the HOA for the structure of the home, then you will most likely need a standard homeowner’s policy. Such policies are known as HO-3 policies and offer coverage for your dwelling, other structures, personal property, loss of use, liability and medical payments. They vary policy to policy so you will want to discuss specific coverages and amounts with your agent, but most will cover all perils except those specifically excluded by the policy.
Whichever policy you need, be sure to get homeowners insurance quotes and consult your agent on the best coverage for you.