In recent years, the popularity of condo living is trending upwards. Although people are beginning to choose condo living in greater numbers, there is also a growing lack of information regarding insurance coverage.
Here’s a scenario. A fire breaks out in your condo unit after a candle falls and causes your carpet to catch fire. You call 911 immediately so the fire is quickly put out by the fire department. Luckily, there are zero injuries. However, the smoke and water affect several nearby units and cause significant damage.
Did you know that as the Condo unit owner, you are considered responsible for the damage and are therefore held personally liable?
If you assumed you wouldn’t be held liable, you aren’t alone. In fact, one study found that 61 percent of condominium owners in Canada incorrectly assume that their building’s insurance also covers damage to other units from water or fire damage originating from their unit. This renders owners personally liable for any damage caused, thereby putting them at financial risk.
Although condo insurance is not mandatory by law, at Haas Insurance we strongly recommended it.
While your condominium building has its own insurance policy, these policies typically only cover the structure and common property of the building. This includes the lobby, elevators, gardens, pool, roof, and gym. This means that your personal belongings inside the unit and the improvements or renovations you’ve made to the unit are not covered. For example, if you unit is damaged during a building-related incident, your condominium association’s insurance policy will typically only cover the cost to repair your unit back to its standard design. If you’ve made any upgrades to the floors or cabinets, for example, these costs will be yours to repair.
If you’re in the market for condominium insurance, here are a few things to ensure that your policy covers:
Personal Belongings: Ensure that your condo policy covers all of your personal property. This includes your clothing, electronics, appliances, kitchenware, and accessories.
Liability: Perhaps the most important coverage is liability coverage. In the unfortunate circumstance that someone is injured in your condo, you could be held liable if they decide to sue you and you do not have the appropriate coverage. This protects you, as well as the people residing in your unit, against any unintentionally-caused bodily injuries and property damage claims. This includes things such as fire damage caused to a neighbouring unit.
Rental Accomodations: If an insured loss occurs and your condo is in need of repairs, you will likely need a place to stay or a location to store your personal belongings. Be sure to check if your coverage includes additional living expenses, such as a hotel room or storage facility costs.
Unit Upgrades: As mentioned above, it’s important to ensure that your insurance covers any improvements you’ve made to your unit. If you’ve made expensive upgrades to your condo, such as installing hardwoods, don’t forget to factor in the value of each renovation into your policy.
Loss Assessment: This is one of the most important things to look for in a condo insurance policy. This means that you can be held financially liable, along with all other condo owners, for the cost of damage to common property. If this were to occur, you may have to cover the cost of the damage that is not covered, the remaining amount exceeding the buildings coverage, or the portion of the deductible determined by an assessment – even if the damage is covered by the building’s policy.
Optional Coverage: The following list outlines optional coverage that you may want to consider including in your plan: sewer backup and overland water damage.
At Haas Insurance, we know that your needs are unique. Our experienced insurance specialist will help you find the right condo coverage for your needs, budget, and lifestyle. Give us a call today to book your appointment.