The results of a recently released survey by the Insurance Bureau of Canada (IBC) finds people who own a condominium unit are confused about their condo insurance coverage.
Though the IBC survey focused on condo dwellers in Quebec, the results may mirror the confusion condo owners in other parts of the country have. For example, one in five owners (19%) did not know two insurance policies covered their condo unit, and that one in three did not have coverage for water damage (or know if they do), although it is the leading cause of insurance claims. Moreover, flooding is the costliest disaster year-over-year in Canada.
The IBC survey results also found:
"We know it's a complex subject that may not be top of the list when looking for one's future home,” said Line Crevier, Supervisor, Insurance Information Centre at IBC, in a press release. “Too many consumers call us with questions after they suffer a loss.”
It is important to know what your condo insurance provides coverage for and the financial consequences of a loss.
Insurance provided by your condo corporation (also known as a strata corporation, condo association, or a syndicate of co-owners) usually covers the building’s main structure and shared common areas.
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.
You are responsible for paying for damages that may occur in your unit, your possessions, and any belongings you may have stored in the building’s storage locker, whether due to fire, theft, floods or renovations. That’s why it’s vital to have a personal policy. Having a basic condo insurance policy will provide you with personal property and liability coverage. However, a basic policy does not include coverage for water-related damage. You need to add optional coverages such as sewer backup coverage and overland water coverage.
Personal property coverage will protect your belongings and appliances inside your condo. On that note, it’s wise to ensure you have an updated contents list to account for the possessions you have. Personal liability coverage protects you in the event of property damage or bodily injury to people visiting your unit. There is a deductible you will need to pay should you file a claim.
Speak to your broker about your needs and make a quick comparison of policies and premiums to determine your options.