Do You Need Condominium Insurance Coverage?

Sometimes it's easy to forget that condo ownership is a kind of communal living. You have your independence as a unit owner, but must also participate in (and abide by) the rules of the condo corporation. When it comes to insurance, you can't assume the building's policy will take care of everything. Without the right additional coverage, you could be left responsible for unexpected costs you might not anticipate.

What Does the Condo Cover?

Policies vary from building to building and regulations are different in each province. However, in most cases the condominium corporation's insurance covers the communal areas of the building and the installed features inside each unit at the time of the original build.

That means your floors, walls, electrical and plumbing may fall under the policy. Sometimes, you are also covered for belongings in your locker and living expenses if you have to vacate due to an insured loss. Condo coverage typically applies for all-risk and major perils, like fire.

What's Left for the Unit Owner?

At first, that sounds pretty comprehensive. But there are many situations when that isn't enough and you end up footing the bill. Those include damage to improvements you made to the inside of your suite. Even for insured losses, the condo's coverage may not be enough, and all unit owners may have to pay the excess.

There's also the possibility of a chargeback of the corporation's deductible. If a loss borne by the condo building was your fault, or started in your unit, you could be responsible for paying the insurance deductible on the claim. Say an overflowing bathtub in your suite caused water damage in the hallway and neighboring suite. You might be on the hook for that deductible.

What Additional Coverage Do Experts Suggest?

The Canada Mortgage and Housing Corporation recommends that unit owners have a policy that covers specific losses, including:

• Deductible chargebacks, when the unit owner causes damage that goes beyond the suite;
• Personal property and contents, such as appliances, furniture, jewelry;
• Unit improvements, such as new flooring, cabinets, and other renovations that replace the original or standard build;
• Loss of use, in the event you cannot live in your suite due to an insured incident;
• Loss assessment, for property damage or liability not covered by the corporation's policy. This includes when a corporation's policy is exhausted and remaining liability is distributed to unit owners. With this coverage, your policy covers your portion of the cost;
• Unit contingency, for structural inadequacies in your unit, not covered by the corporation's policy;
• Personal liability.

The Insurance Bureau of Canada also recommends directors' and officers' liability coverage for those unit owners who also serve on the condo's board of directors. All in all, your additional insurance should cover you, your individual suite, and fill any gaps left by the condo corporation.

Review Your Insurance Coverage Today

It's always a good idea to read your condo corporation's insurance policy so you know what's covered and what isn't. To find out your options for additional coverage, check out Rates.ca for competitive prices and reliable protection.