Condominium insurance policy for unit owners – A must have
Condominium insurance is a must for condominium residents and the condominium corporation. Specific insurance requirements vary from province to province.
Condominium corporation charges a monthly condo fee. A portion of this fee may cover the following insurance costs:
- Common areas
- Condo corporation’s property, such as furniture, equipment, vehicles, etc.
- Personal liability-against claims for bodily injury and or property damage occurring on the condominium property or caused by some act or omission of the condominium corporation
- Directors and Officers insurance-to respond to claims made personally against a director or officer of the condominium
- All perils as per the condominium governing documents
As a general rule, every condominium corporation is required to give to each owner, copy of corporation’s condominium insurance policy; a copy of the insurance certificate each year, and you should also be able to examine the policy in detail in the property management office. It also should form part of the status certificate.
Unit owners responsibility
The unit owners are responsible for insuring their personal property contents such as appliances, furniture and jewellery, and items stored in lockers, including any improvements and betterments made to the unit (for example, finishing a basement, installing new cabinets) and their personal liability. Failure to maintain an adequate condominium unit owners insurance could result in severe financial hardships should a serious loss occur.
Mistakes caused by you or someone else; like overflowing toilets, fires, discharge hose jumps etc. can cost a fortune. It can mean that either residents end up paying now through their individual insurance claims, or later when their condo fees rise because of higher corporate premiums.
All of these “what ifs” can be avoided by simply securing a proper condominium insurance policy covering your own belongings, along with liability and additional living expenses; should your unit ever become uninhabitable, and all the betterments, improvements and any fixtures in your suite that are excluded or not not covered as part of the standard unit and most importantly, you should have deductible charge back coverage, in case you must pay the deductible on the condo corporation’s policy.
The Condominium Act says that a corporation should maintain a “reasonable” deductible. The majority of condo corporations have deductibles ranging from $1,000 to $10,000 in general.
Condominium owners should get unit owner’s package insurance policy and the investors renting out their units should also obtain proof of insurance from their tenants. You should check with your insurer as to whether you are covered if your condo corporation charges back the above deductible (or a portion of it). There are many unit owners policies in today’s market place that do not provide the coverage or in many cases an adequate limit of insurance to protect unit owners against these major concern.