The basic condo or townhome structure is usually covered by a condo association master policy. Then each unit owner is responsible for their liability, personal contents (dishes, clothing, etc), and possibly interior building items (this can be flooring/cabinetry/countertops/remodel improvements). Sometimes the master policy covers the whole building structure in which case the unit owner may only need enough coverage to take care of the master policy deductible if the condo association requires them to pay it in a claim.
This is very important to find out in advance because the deductible is often $5,000 or more and is not automatically covered by the policy. The condo association covenants, conditions & restrictions are important to examine because they lay out the insurance responsibilities of the unit owner. The master insurance policy will follow the CCR’s, even if the policy does cover betterments and improvements if the CCR’s state the unit owner is responsible then their individual policy will need to provide coverage. We can find out most of this information from your property manager.
There are additional condo coverage options that are recommended such as loss assessment coverage for when the unit owners are assessed following a covered claim. Sometimes the master insurance deductible will be paid out under the loss assessment coverage. Please check with your insurance agent for your specific needs.