Do I need condo insurance?
6 minute read Published on Oct 10, 2024 by BrokerLink Communications
If you live in a condo, it might seem like a logical decision to purchase condo insurance. However, you might wonder if you really need it. In short, the answer is yes, but why? You probably have so many questions about condo insurance and if it really helps you. Take it from us when we say it’s worth the money. Remember that if you are renting, you should instead look into tenant and renters insurance.
It’s time to shed some light on condo insurance and what it can do for you. Are you ready to explore the exciting world of condo insurance? Let’s discuss what condo owners need to know about purchasing an insurance policy.
Reasons to purchase a condo insurance policy
It doesn’t matter what condo corporation owns your building—you should purchase a condo insurance policy! Think of it as an investment that will pay off in the long run. When you live in a condo unit, you might wonder why you should purchase an insurance policy in the first place. Let’s find out why you should:
Your mortgage or financing company may require it
Is condo insurance mandatory? While condo insurance isn’t mandatory in Ontario and many other provinces, you might have to purchase a policy if you are financing your condo. In most cases, the lender will require proof of insurance sent from your broker before giving you a loan. You can find out more about how to provide proof insurance in our guide to home insurance vs. homeowners insurance.
Even if you don’t have a mortgage, you are risking your personal property and personal belongings. In other words, if your condo gets damaged, you will have to pay out of pocket for repair and replacement costs. Do you really want to take that risk?
Your condo corporation’s coverage does not protect you
A common misconception is your condo corporation’s insurance policy will protect you. However, this isn’t the case. The maintenance fee you pay each month covers their personal insurance policy as well as damage to the building and common areas, such as the lobby, elevators, hallways, pool, gym and other amenities.
The building insurance policy does not cover individual condo owners. To protect yourself and your personal belongings, you have to purchase your own condo insurance policy. In addition to having your own insurance policy, you should also be cautious. Check out our home protection tips to keep yourself safe from fires and other potential hazards.
It replaces your personal property
Condo insurance provides a specific amount of coverage. It will cover the costs to repair or replace your personal belongings if they are destroyed, damaged, or lost. It will also extend to personal property that you keep in a storage locker or other items you temporarily remove from your home, such as if your child is away at university or college. If you bring your laptop on vacation and it’s stolen from your hotel, you can make an insurance claim under your condo insurance policy.
However, be aware that there are exclusions on common valuable items such as jewellery and high-value bikes. Check your content limits and speak with your home insurance broker if you have any unique or valuable items. An experienced broker can provide you with the best options to ensure you receive proper coverage.
Assistance after a loss
If you make an insurance claim for a fire or water damage and have to move out of your condo unit temporarily, loss of use coverage matters. It’s the part of your policy that will cover additional living expenses you incur while away from home. Examples include payment for hotels, restaurant meals, clothing and personal items after a loss. Your condo insurance will also cover any maintenance fees you have to pay during this time as well.
Offers personal liability coverage
Your condo association’s policy probably has liability coverage for accidents or injuries that occur in the building’s common areas. However, anything that happens inside your condo unit is covered by your personal condo insurance policy. For example, if you have a party and one of your guests falls and injures themselves, and that person sues you, your personal liability insurance coverage will pay for the legal fees. $1 million liability insurance used to be the norm, but $2 million coverage is becoming more common, and the price difference is minimal.
Common elements loss assessments are used for when your condo corporation makes a claim
You might think your condo association’s policy will cover if you get injured in a common area. However, this isn’t exactly the case. The policy will cover payments for lawsuits and damages, but deductibles can be as high as $50,000. To offset the cost of the deductible, the condo association will split the cost between all of the individual condo owners.
Luckily, there is a way to protect yourself from this situation. Having your own personal condo insurance policy comes with something called loss assessment. It will help pay for your portion of the deductible after your condo association makes an insurance claim.
Loss assessment coverage can also help you if there is damage to the building that exceeds the coverage limits of the condo corporation’s insurance policy. If a water loss in the building results in $1.5 million in damage, the master policy for the building won’t be able to cover it with $1 million. The remaining $500,000 needed for the repairs will become the responsibility of the condo unit owners. If you don’t have loss assessment coverage, you will have to pay your share out of pocket.
If you’re a condo owner, we recommend reviewing your condo association’s master insurance policy. It shows you their coverage limits and whether or not they have special deductibles for certain scenarios. Reach out to your insurance broker with questions.
Condo insurance is a type of homeowner’s insurance. It’s important to have because, without it, you are only paying your condo fees, which only pay for maintaining the building, not your individual unit. Having adequate coverage will give you peace of mind and prevent damage from unexpected events from costing you a small fortune. Speaking of a small fortune, that’s how much it costs to buy condo insurance, which we will discuss shortly.
The costs of condo insurance
Now that you know you need condo insurance, you might wonder how much it costs. You might be surprised to find out that condo insurance costs aren’t as high as you thought. It costs less than homeowners insurance.
Prices start as low as $300 per year! However, you should be aware that the price of personal condo insurance will vary depending on the building you live in. However, since you know how much condo insurance covers, you’ll want to purchase insurance while living in your condo building if you haven’t already. In addition to its low costs, you may be eligible for home insurance tax deductibles.
Having a property insurance policy is essential to addressing your needs. As mentioned earlier, condo insurance and any other type of building insurance don’t just protect the building. They protect your personal belongings and any other insured loss.
Whether you’re purchasing your first policy or changing house insurance, paying for condo insurance is worth the costs. Getting your own personal policy will protect you in the event that something happens inside your condo unit. It’s simply not worth the risk. However, finding the right coverage for your needs can sometimes be difficult. That’s why you should reach out to an insurance broker to find a condo insurance policy with an insurance company that advocates for you.
If you need condo insurance, reach out to BrokerLink!
You might worry about having to pay for condo insurance on top of additional living expenses. However, the costs are worth it in the long run. Having an insurance company that advocates for you can help unit owners and renters maintain their rights while living in a condominium building. If you’re looking for more information about insurance while renting a condo, check out our tenant insurance guide.
Depending on where you live, you might also want to purchase high-value home insurance. Those living in upscale condos should take precautions to protect their property and personal belongings. It’s important to note that additional insurance coverage may be required for valuable items. Adding additional coverage to your policy will increase your insurance premium, but it is worth it for peace of mind.
Do you need coverage for your condo? Maybe you’re considering bundling your home and auto insurance policies. Either way, one of our professional home insurance brokers would be happy to help! Use our online quote tool below, or give us a call to get started.