Do I need insurance if I live in a condominium?
6 minute read Published on Jul 13, 2024 by BrokerLink Communications
Condo insurance is a type of home insurance policy specifically tailored to condo owners who live in a building with other residents. If you're a condo owner, you may be under the impression that your condo corporation is already paying for insurance, which is paid out through your monthly condo fees.
While this is technically true, there are still shortfalls in coverage that you, as a condo owner, need to be aware of. So, is home or condo insurance worth purchasing? Read more to learn about all things condo insurance related down below.
What is condominium protection insurance?
Condominium insurance helps protect owners from the unique risks that come with owning a condo unit in a community living area. While all policies are different, here is a rundown of what standard condo policies will cover:
Personal property coverage
This condo insurance policy protects the personal belongings that are stored within your condo, such as your furniture, electronics, clothing, and other personal items, against insured perils. Typically included in this is damage from fire, theft, vandalism, and some types of water/flood damage.
The interior of your condo
This portion of your condo insurance coverage protects the interior parts of your condo unit. This includes things like flooring, cabinets, and appliances. Additionally, if you have made any improvements to your unit, it will also be included under this coverage.
Liability protection
Liability insurance provides coverage if you are found to have personal liability for bodily injury or property damage to others. This includes covering the cost of medical payments for injuries, attorney fees, settlement funds and other costs if a third-party suit is filed against you.
Additional living expenses
Additional living expenses is a type of coverage that pays for any temporary living costs if your condo becomes unlivable due to a covered peril, such as a fire or water damage.
Loss assessment coverage
Loss assessment coverage is the final part of condo insurance that helps pay for your share of repair costs, or personal liability claims that happen in your building's shared living space. This can include damage to common areas or injuries occurring in shared spaces that exceed the limits of your condo association insurance.
Do you need house insurance on a condo?
Technically, like home insurance, you do not legally require condo insurance. That said, unexpected events can happen at any time, and your condo corporation's coverage will not cover your unit.
Therefore, if you want adequate coverage, unit owners are encouraged to purchase a separate insurance policy for their condo units. When considering the overall replacement costs, lawyer fees, and additional costs associated with insurance claims, purchasing condo insurance is an affordable option that offers comprehensive protection of your personal property and liability.
What is the difference between strata insurance and condo insurance?
Many people assume that their condo association pays insurance for the entire property, including their individual unit. However, this isn't the case. So, what is the difference between your condo association insurance and a condo insurance policy?
Condo owners
Condo insurance is held by individuals who own a unit in the building. Unlike the master policy, a condo insurance policy protects your personal belongings, the unit itself, and you from any liability claims. It also includes additional living expenses coverage, which provides compensation if the unit owners need to move out of their space while improvements are made to restore their homes following damage.
Condo corporation
Strata insurance, also known as the master policy, is held by the condo corporation that governs the building. It will provide coverage for the following:
The physical building structure
This coverage encompasses the physical structure of the building, including any common areas like lobbies, hallways, roofs, elevators, and amenities like swimming pools, gyms, the parking garage, and outdoor spaces.
Liability coverage
This provides liability coverage for injuries or damages that occur in common areas shared by all residents in the building.
Ultimately, the key difference between condo insurance and the insurance coverage held by your condo corporation is the fact that the corporation only insures areas that are shared by all tenants rather than your individual condo.
Is condo insurance mandatory in Canada?
No, condo insurance is not mandatory in Canada. However, having coverage for your individual unit is a worthwhile investment that not only protects your personal belongings but also safeguards your financial interests in the event that an insurance claim is filed.
How much is condo insurance in Ontario?
Condo insurance in Ontario will vary between policyholders, given that there are numerous factors taken into account when calculating a premium. However, for general information purposes, you can expect to pay between $300 and $600 a year to insure your condo.
Some common variables that will be taken into account when calculating your condo insurance costs:
Where your condo is located
If you live in a large city area with a higher crime rate, you may pay more than someone who owns an apartment in a smaller town.
The age of the building
The cost of your insurance will also depend on the age and current condition of the building your apartment is in. Older buildings are more prone to problems than newer buildings.
Safe features
If your condo is equipped with full-time security features like cameras, gated garage spaces, and security personnel, you may be able to get a discount on your premium.
Deductible amount
A deductible is the amount you pay out of pocket before the insurance kicks in. Opting for a higher deductible typically lowers your premium. Just be sure you can afford a more expensive deductible cost in the event you need to file a claim.
Coverage limits
Higher coverage limits will increase your insurance, and your insurance company will charge you for insurance, as you are essentially opting for further coverage.
Additional coverage options
Beyond standard condo insurance, there are optional policies that you can add to your overall insurance portfolio for an extra cost.
Discount eligibility
Many condo insurance companies offer various discounts to customers who bundle their insurance plans, are members of a professional organization, are long-time customers of the company, and more. Don't forget to ask an insurance agent whether you qualify for any rebates!
What about my storage locker? Is it covered by my condo insurance?
Yes, your storage locker is typically covered by your condo insurance. The personal property coverage in your condo insurance policy will extend to items stored in your storage locker, meaning they will be protected if they are damaged or stolen while being stored in the storage locker.
Do you need condo insurance if you're renting?
No, if you are renting a unit in a condo building, you do not need to purchase condo insurance. Condo insurance is only meant for condo owners.
Instead, we suggest purchasing a renters insurance policy, which protects your personal belongings and offers liability protection in the event someone alleges injuries or damages to their personal property as a result of your actions or inaction.
What does condo insurance cover and not cover?
Condo insurance covers your personal belongings, the interior of your condo, additional living expenses, liability, and loss assessment.
That said, there are some things that are not covered by a standard insurance plan, including the following:
Common areas in your building
Any common areas throughout your condo, such as the elevator, amenity rooms, hallways, lobbies, and other spaces that are shared between you and other residents, are not included in your condo insurance policy.
Floods and natural disasters
Standard condo insurance policies will usually exclude any coverage for damage that is caused by flooding or natural disasters. To ensure you have coverage against these risks, you will need to purchase add-on policies.
Normal wear and tear of your unit
Any normal wear and tear, maintenance problems, and deterioration of your condo unit that happens as it ages will not be covered by condo insurance.
Expensive items
Items such as expensive jewellery, artwork, collector's items, and specialized electronics will not be protected under a standard policy. Again, additional coverage will be needed if you want to protect any valuables you own.
Intentional damage
Lastly, any damage that is intentional or caused by illegal activities will be excluded from coverage under condo insurance policies.
Get personal condo insurance policies with BrokerLink today!
Are you interested in getting a personal condo insurance policy? BrokerLink can make it happen!
BrokerLink operates throughout a plethora of different locations across Canada, so if we're in your neighbourhood, don't hesitate to visit us in person! You can also reach us over the phone during regular business hours.
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