Condo, including townhouse insurance works a bit differently from homeowners insurance. It doesn't usually protects the overall structure, of your strata building or common property, but it frequently does help with gaps and coverage needs that are specific to condo owners.
Things to consider
Condo and townhouse insurance have a number of things to consider that are unique to this sort of home.
Because a strata frequently (but not always) has neighbors in close proximity to each other and sharing parts of the same structure (as in an apartment or townhouse situation), the chance that you will cause and be held responsible for damage to your neighbors' property is much greater. This is in part because while you may share the structure with your immediate neighbors which is (hopefully) covered under a strata insurance policy, you are generally responsible for what happens inside your unit - whether or not it is your 'fault'.
For example, lets say you have in-suite laundry, and the washing machine breaks, leaking soapy water onto your floor and then damaging your neighbor's downstairs unit, this is generally considered your responsibility, and so the downstairs neighbor could sue you. If you have condo insurance that includes liability for this sort of thing, it could protect you from having to pay your neighbor out of pocket. It could also help pay to have your own floor repaired - if you also have the appropriate coverage for water damage.
Strata insurance vs Condo insurance
First of all, make sure that your strata has a strata insurance policy! Odds are, it is legally required to, but it is good to know what it includes, and what it does not.
A strata policy is generally meant to offer coverage for the strata building(s), and common property, as well as to cover liability issues for the strata as a whole. The strata is generally responsible for the building exterior, and all common property. This normally also includes things like exterior windows and balconies - even though they may be for the exclusive use of a particular unit owner. A strata policy frequently includes a very high deductible - potentially up to $5000, $25000 or even more. As well, there is also a liability limit - meaning if the strata as a whole was sued for say $5,000,000, but the strata policy only covers $2,000,000, the remaining $3,000,000 would need to be paid collectively by all the unit owners!
A condo policy is generally meant to cover the individual condo unit, its owner and family for liability, improvements made to the unit, damage within the unit, and personal possessions. Look at your condo coverage in comparison to the strata policy, and see if there are gaps in coverage. For example, your condo policy may have coverage for strata liability: this is usually meant to protect you in case the strata is found liable for an amount that is beyond its liability coverage from having to pay out of pocket as a unit owner. As well, the condo policy may have a strata deductible coverage so you may not need to pay the very high strata deductible in the event it will need to be used to rebuild/replace your home/strata building.
OK, so most types of home insurance have some sort of coverage for personal possessions, known as 'contents'. My personal experience in selling insurance is that most people don't have a clue what the replacement, (or actual cash value) of their stuff is - the important number depends on the sort of insurance coverage that you have. With condo insurance, you frequently need to figure this out yourself. there is no such thing as an 'average' amount. It's absolutely different for everyone.
A good exercise to do (I've done it myself), is to make an inventory of your stuff. You don't need to be exact, but the more accurate and thorough your inventory is, the better. Do it room by room: taking into consideration your furniture, electronics, decorations, accessories of every sort:, linens, clothes: everything. Use your best estimate on what it would cost to replace all this stuff with similar but new stuff - or the re-sale value of your stuff if your insurance is based on actual cash value. The odds are if you have a replacement cost policy, the amount it would cost to replace everything would probably surprise you. (it sure did for me - it turned out I was probably off by 50% before I did an inventory!)
There is one thing to consider about this though: if you have anything that is valuable because it is one of a kind, rare, or an antique - a standard home policy is likely not going to be able to properly capture its value.
For example, if you are a painter and you make money from your art, a standard replacement cost policy may literally only cover the cost of the materiel used to make your painting - such as the paint and the canvas! This is because the basic insurance may not be built to cover the added value of your creativity or actual resale value. In order to cover this sort of thing better, be sure to tell your insurance advisor - there may be a special rider (add-on) available, or perhaps a separate insurance policy (maybe even from another company) might be required. Either way, don't make an assumption the coverage automatically comes with the policy.
Insurance on Improvements
The way a strata policy normally works is that when there is damage to the structure of the building or the common property, it will be responsible for the repairs. It usually also is responsible for the rebuilding of your unit in the event it is destroyed or structurally compromised. So in the event of a fire, when the strata is rebuilt, the strata policy will cover this, as well as the rebuilding of your unit of 'like kind and quality' as compared to the original base design of the building. Of course this will be of a contemporary design, but if the original build had basic carpeting and Arborite counter tops, that's what the rebuild will have too. This is fine if that's how you left your unit - but if you installed hardwood flooring, marble counters, and other upgrades, that added investment could be lost. Therefore be sure to look at the improvements coverage in your condo policy as this coverage is meant to protect the added value that you have invested in your home.