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Personal condominium insurance works the same as any other home insurance policy. The insurance company assesses the likelihood of you needing to make a claim in the event of theft, property damage or personal injury, and they provide a quote based on that assessment.
Condo insurance typically extends coverage to your possessions, even when you are travelling with them or they are being stored in your storage locker. It also takes into account the fact that you are living in a shared building with multiple other people and the unique risks that accompany that.
You don’t need insurance for the physical structure of your condo building or any common areas. These are covered by condominium corporation insurance (sometimes called strata insurance). You contribute to condo corporation insurance via a portion of your condo fees, but managing the policy is the responsibility of the condo board.
As the proud owner of a condominium unit, you need personal condo insurance. It provides financial protection against theft or damage to your possessions, covers repair and replacement costs to any upgrades you have made, protects you against lawsuits should someone get hurt in your unit, and will even help with unforeseen living expenses if you have to leave home for a while due to an insurable claim. Here is a summary of the most basic components of condo insurance:
If you have expensive possessions or have done a lot of work to your unit, a basic condo insurance policy may not provide adequate coverage. Fortunately, there are many optional coverages available to bolster your policy. Here are some of the more popular ones:
Corporate condominium insurance, or strata insurance, is the insurance condo management takes out to protect the building structure and communal areas such as the hallways, elevators, swimming pool and other shared amenities.
It also protects corporate assets such as lobby furniture or fitness equipment, and provides liability coverage in the event that somebody is hurt in a common area and sues the condo corporation.
As an individual condo owner, you are not directly responsible for corporate condo insurance, but a portion of your condo fees will go towards the premiums.
There is no legal requirement for condo insurance. However, if you have a mortgage, the lender will often require that you have it. Even if you are mortgage-free, condo insurance is strongly recommended to protect you and your possessions.
Residential title insurance protects the buyer (and mortgage lender) against problems that may arise during the transfer of property ownership, including title fraud and losses associated with survey issues. You might need this when buying a new residence, but it is not the same as condo insurance.
Nobody can claim to offer the cheapest condo insurance without first knowing a few details about you and your home. We ask the same questions as the insurance companies, and show you accurate quotes based on the information you have provided. Simply pick the cheapest rate and we will connect you with the provider. For additional savings, consider bundling your condo insurance with your car insurance.
If you live in one of Canada’s large cities, you can get annual coverage starting around $25 per month with a basic policy providing $50,000 worth of contents coverage. Increasing your contents coverage, or adding optional endorsements will cause your premiums to rise.
There are two types of condominium insurance, and people often get confused:
1. Corporate condo insurance is the same as strata insurance. This type of policy is taken out by your condo board to protect the physical structure of the building, and any communal areas.
2. Condo or condominium insurance (without the “corporate” bit) is designed for individual condo owners, and it fills in the gaps where your condo’s corporate insurance falls short. It protects you, your personal unit, and the possessions within it.
Your condo’s corporation insurance is not intended for the personal protection of condo residents. It protects the condo board against costs associated with damage to the building and its common areas. It may extend to the basic fixtures in your condo unit, such as wiring and plumbing, but it does not normally cover anything within the walls of your unit, including your personal possessions.
This is why it is so important to get a personal condominium insurance policy. It provides essential personal protection, and the corporate policy does not.
Owner’s increased improvement coverage is designed to cover any upgrades you have made to your condo, whether that is installing nicer light fixtures, upgrading the flooring, or anything else that costs money and adds value. Some of these upgrades will be covered by a standard policy, but if you make a lot of expensive improvements or renovations, it is advisable to increase this coverage..
If you live on the ground floor, or below ground level, sewer backup coverage is extremely important. It only takes one careless unit owner to flush a diaper down the toilet, and suddenly your unit is flooded with sewage and waste.
While strata insurance will cover the cost of clearing the blockage (assuming the pipes are outside of your condo unit), they won’t cover expenses associated with cleaning sewage water from your apartment, or replacing your soiled belongings.
If you live on a high floor, the likelihood of sewage water reaching your unit is small (all drains below your unit would have to be blocked in order for the sewage to reach you), but you are still at risk. Firstly, your storage locker is probably at ground level. Additionally, if the lobby gets flooded with sewage, you will not be able to access your unit, and if you don’t have sewer backup coverage, you would not be eligible for help with temporary living expenses.
Overland water is any water that comes into your condo from outside of the building, typically a result of rainfall. If you live on a low floor, especially if you are near a river that could flood, it is advisable to have this coverage. Condo corporation insurance should cover structural repairs following a flood, but it won’t cover flood damage to your furniture, electronics, or anything else in your unit, which is where overland flood protection comes in.
Ontario has never experienced a catastrophic earthquake, and it is not included in standard condo insurance policies for that reason. Periodic tremors, especially in eastern Ontario, have caused some damage in the past, but modern buildings are designed to absorb the shocks without damaging the interior units.
However, if you live on the west coast, earthquakes are a very real threat and you should consider adding this coverage to your policy. In the lower mainland of British Columbia, all property insurance companies require significant earthquake deductibles.
The owner’s personal insurance policy does not extend to you or your belongings. You need tenant insurance, also called renter’s insurance. The good news is you do not need a lease to get tenant insurance, and it is very affordable.
The cost of insurance varies depending on the city and province you live in, but even “identical” units within the same building can yield different quotes. Your condo insurance rate is determined by the likelihood of you needing to make an insurance claim. Here are some factors that insurers consider when calculating your condo insurance premium:
The cost of condo insurance, and any type of property insurance, is closely linked to “catastrophic events” and their impact on insurance claims.
In Canada, an event is catastrophic if it causes more than $25 million of insured damage. Due to climate change, an increasing number of catastrophic storms, floods and wildfires have seen insured losses increase steadily over the last 35+ years.
| 5-year period | Loss (plus loss adjustment expenses in 2017 dollars) |
|---|---|
| 1983-1988 | $0.9 billion |
| 1988-1993 | $1.1 billion |
| 1993-1998 | $1.8 billion |
| 1998-2003 | $3.7 billion |
| 2003-2008 | $2.6 billion |
| 2008-2013 | $5.7 billion |
| 2013-2017 | $11.4 billion |
Data taken from IBC Fact Book - 2018
This alarming trend shows no sign of abating, and it has a huge impact on condominium insurance premiums. To highlight this point, take a look at some condo insured losses from Alberta and British Columbia (2018 - most recent complete data):
| Region/claim type | Claim amount |
|---|---|
| BC/Fire | $29,360,000 |
| AB/Fire | $23,508,000 |
| AB/Water | $1,550,000 |
Insurance companies are losing money due to these claims. In fact, underwriting losses for Canadian condo corporation insurance went from $69 million in 2017, to $564 million in 2018.
These huge losses are unsustainable, and as a result, fewer insurance companies are now willing to provide corporate condo insurance. This lack of supply, coupled with ever increasing demand, is driving premiums up.
Ultimately, these high costs are passed on to condo owners in the form of condo fees and higher personal condo insurance premiums. For this reason, it is more important than ever to compare quotes with RATESDOTCA to ensure you’re finding the best available rates.
We understand that your condominium is your safe space, a home to you and the possessions you treasure. Condo insurance will provide peace of mind and financial protection when you need it most. The best way to save on condo insurance is to compare quotes with RATESDOTCA. We compare quotes from more Canadian providers than anyone else to find you the lowest price. Don’t risk your home and everything in it. Compare condo insurance quotes and find the best policy today.
