Photo: James Bombales
Condo insurance is recommended if you own a condo unit. Unlike traditional homes, with a condo, you don’t own the building or the land — you own your specific unit. While your condo corporation will have a master insurance policy, it covers what happens to the exterior of the building and common areas. It won’t cover personal use, repairs to your unit, or theft. It also won’t cover you if a guest is injured in your condo. Hence, having your own insurance policy can help in the event of an accident or fire in your unit. But what exactly does condo insurance cover? And more importantly, how much coverage do you need?
Here are a few tips about condo insurance, what’s covered, and how to save on your policy.
What is covered by condo insurance?
Photo: James Bombales
Your condo is your castle and you want to protect it. Condo insurance covers your personal belongings if there’s a fire, vandalism or theft in your unit. Your policy also covers repairs and provides money to replace your belongings. It even protects you from lawsuits if someone is injured while visiting or staying in your unit.
While renters insurance is optional, condo insurance is mandatory for unit owners. You need coverage in case a fire breaks out in your kitchen and spreads to other units, or in the event your washing machine overflows and leaks into your downstairs neighbour’s bedroom.
Here’s a breakdown of what is and isn’t covered by condo insurance.
Your insurance covers: A burst pipe, lightning, vandalism, smoke or fire damage, theft in your unit, and damage from wind, hail or an explosion.
- Damage is incurred inside your condo unit: Condo insurance is mandatory for all unit owners. Most master policies are deemed “all in” by the condo corporation, meaning it covers lighting, cabinetry, wiring and fixtures. But if your condo corporation has a “bare walls” policy, your insurance must cover everything in your unit aside from the floor, walls and ceiling.
- You are displaced from your condo unit due to damages: Your policy covers you if there’s a fire, plumbing damage, or another problem that makes your condo uninhabitable. The policy will pay for your hotel bills while repairs are made. It may also cover moving expenses and storage for your belongings.
- Your personal property is stolen from your condo unit: You need a personal insurance policy if you want to get back what was stolen from you. It will cover the theft of items such as electronics, clothing and furniture.
- There is building damage beyond the condo corporation’s policy coverage: If there’s external damage from severe weather, the condo corporation’s master policy will cover it. But, if the damage exceeds coverage in the policy (i.e. if there’s a shortfall), they may require owners to fork over more money to make up the difference. However, your policy will have a section for “loss assessment” that covers this.
- Someone gets hurt in your condo unit: Did a guest trip over the runner in your hallway? Bump their head on a kitchen cabinet? If a person gets hurt while in your unit, your insurance will protect you from lawsuits. Your policy will also help cover the person’s medical bills and any associated legal costs.
What is covered by the condo corporation policy?
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- Damages that affect the exterior of the building: The building’s insurer will cover the cost of damages in the event of severe weather, a disaster or fire.
- Damages to the common areas: Common areas include the laundry room, lobby and elevators. They also include the grounds, pool area, gym and garage. The condo corporation policy will cover any damages to the common areas, which are shared by all condo unit owners.
- Injuries sustained in a common area: The condo corporation policy includes liability coverage if someone falls on the property due to icy pavement. Or, if the person is injured due to a wet floor in the laundry room.
What may not be covered by your policy or the condo corporation policy?
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- Earthquakes
- Flooding caused by severe weather
- Intentional injuries to another person
- A nuclear hazard
- Damage from birds, rodents or insects
- Normal wear and tear
- Damage from an underground water system (like a sewer backup)
Note: Supplementary coverage or add-ons may be available to protect against some of these issues.
How much condo insurance should you buy?
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When shopping for insurance for your condo unit, take an inventory of everything you own. Although time-consuming, it can help you prepare a proper assessment of your home’s interior value. If you ever need it for insurance purposes, you’ll have a copy. Update it when you make a new purchase like electronics or artwork, update fixtures and furnishings, or make any other costly upgrades.
When deciding how much insurance to purchase:
- Take an inventory of all your belongings: Include all artwork, collections, electronics and valuables. You should take photos or record video footage of every item you own — and be sure to include serial numbers for all electronic items. Store this information safely online. If there’s ever a fire, you don’t want your inventory list to go up in flames.
- Give every item a dollar value and write it down: You can find inventory apps online that will help you calculate the total value of your belongings.
- Check your master policy: Look over condo corporation master policy to verify whether it’s an “all in” policy (covering lighting, cabinetry and fixtures) or a “bare walls” policy (does not cover wiring and plumbing).
- Compare condo insurance plans: Use an online insurance comparison tool to find the best rates on condo insurance. When you come across a plan you like, contact the condo insurance agency to lock in your rates.
- Call an agent: Speak to your condo insurance agent to find out what’s in the condo corporation master policy and give them the total value of the items inside your condo unit. The agent will then recommend how much insurance you should carry.
How much does condo insurance cost?
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A typical condo insurance policy may cost as little as $250 to $300 for $50,000 in coverage. In Toronto, insurance will cost more than areas located in smaller provinces or territories. Condo insurance provides protection if something happens inside your unit. It also covers you if a fire or damage from a washing machine in your unit affects others. It also provides liability coverage in case someone gets hurt while inside your condo. When you shop for insurance, use a comparison tool to save money on your policy, and only set a high deductible if you have money saved in an emergency fund.
