Are you confused by your condo insurance needs? Are you wondering if the condo corporation is responsible for your condo insurance? If you are a tenant and not an owner, are you unsure about the ins and outs of renters insurance?
Condo insurance can be confusing, and that is why we have put together a handy guide—so you can understand your condo insurance policy and the risks it covers when you buy a condo.
Before we get started, it is important to know the following: you do need condo insurance as an owner or as a tenant, but there is another policy that also comes into play. It is the condominium corporation’s insurance, which protects the building envelope and common use areas. It does not protect your individual condo unit (which is why you need a separate policy).
Here is what condo insurance for home owners covers.
Condo Insurance for Home Owners Covers Six Main Risks:
- Your contents: Should anything happen to your contents, such as damage through flooding because your above-floor neighbour left a tap on, damage from a burst pipe, or damage and theft thanks to a break in, condo insurance covers these risks up to a pre-defined value.
- Condo upgrades: Condo insurance covers not only your contents, but also your condo upgrades, such as hardwood floors, upgraded cabinets and kitchen counters, moldings, etc.
- Liability: It is important to make sure that not only your contents are protected, but also that your finances are protected if you are sued for negligence (flooding your neighbours’ unit, having an oven fire that damages other units, etc.). Condo insurance’s third party liability protects against this risk.
- Locker: This part of your condo insurance is a little-known fact: your condo insurance often covers the contents in your storage locker!
- Living expenses: Should your condo become uninhabitable though flood, fire, or another disaster, causing you to have to live in a hotel for several months while your condo is being repaired, an insurer will pay a reasonable price for your accommodation. Do not expect it to be a five-star hotel, but it should be quite livable.
- Condo assessments: If your condo corporation does not have enough funds to cover the consequences of a particular accident, like roof damages due to strong hail or a storm, they may decide to pass some of the repair costs to the condo unit owners. These costs, called special assessments, can often be covered by your condo insurance policy as well.
- Fair rental value: Should you not be able to rent out your place due to an accident, you are basically losing your rental income. A condo insurance policy can provide protection against that risk as well. A rental value will be determined based not on what you consider being fair, but on what your insurance thinks to be an appropriate amount based on comparable units in the area.
Condo Insurance for Tenants Covers Three Main Risks:
Tenant and renters insurance is the same thing, although it may be called by either term by your carrier. It’s more than a nice-to-have policy; it is required by most landlords.
Condo insurance for tenants is designed to cover the following risks:
- Your contents:When you rent a condo, there are still plenty of things in it you own – from your laptop and other electronics to your clothes, shoes, and personal items. A tenant insurance policy insures these items up to a particular value. Remember, though, that should you have any expensive items, such as jewellery or a wine or art collection, you should get a separate insurance endorsement for them.
- Liability: Even if you rent a condo, there is a chance that others can sue you in particular cases, such as if you let water flood condo units below you. Smoking in bed or forgetting about candles, thus leading to a fire that damages a couple units can be an issue as well. Condo liability coverage protects you in cases like this.
- Living expenses: If your unit is uninhabitable due to fire, flood, or other damages that are listed in your policy, your condo insurance covers reasonable living expenses to find alternative accommodations for the duration of the repairs, or for a set number of months.
Condo Insurance and High-Value Items
Despite the fact that condo insurance can cover your contents up to a pre-defined amount, it will not necessarily cover expensive items, such jewellery, art, etc. Make sure that your insurance provider is aware of these items, that these items are appraised, and that you have purchased separate coverage for this items (also called insurance endorsement).
We hope you will find these tips helpful. We can help you with the best condo insurance policies available on the Canadian market, along with coverage for your other insurable needs.