As a condo unit owner, there are many factors to consider when trying to find the best condominium insurance coverage. There are actually two important policies to examine: your condo insurance and the condominium corporation’s insurance.
Both policies are very important and they need to work together to ensure that gaps in coverage are limited. Let’s start with your personal condo insurance coverage and then we’ll get into how they work together for a complete solution.
Condo Insurance Coverage Explained
Condo insurance protects you and your things within the walls of your unit. It covers personal assets like your belongings, betterments, and improvements made to your unit, and your personal liability.
The belongings in your unit include electronics, appliances, furniture, clothing, etc.
Improvements or upgrades to your unit can include flooring, countertops, appliances, electrical, plumbing, cabinetry, wall coverings, etc. If you or a previous owner did renovations to the interior of the home, the “standard unit” clause of your condo corporation’s insurance would limit the amount you would receive after a claim.
This is where your personal condo insurance policy would apply and fill in that “gap” between what the condo corporation’s policy covers and the actual cost to replace/rebuild any damages.
In addition to your belongings, the personal liability portion of your policy covers you against lawsuits for bodily injury or property damage that you or a family member—or in some cases, pets—cause to other people.
When reviewing your condo insurance coverage, it’s important to match the cost it would be to replace your personal assets, including all improvements made.
Condo Corporation Insurance Deductibles Often Overlooked
As noted earlier, the condo corporation's policy will only cover the cost to rebuild your unit to the original build. Ensuring you have the best condominium insurance coverage is essential to protecting the actual value of your property.
Common Elements of a Condo Corporation
One of the benefits of living in a condo versus a single-family home is that you share the cost of common elements and expenses, like a pool, workout facility, recreation centres, snow removal, etc.
However, you may be assessed for damages to these common elements or lawsuits against the condo corporation. If you don’t have personal condo insurance, you will have to pay your portion of these costs yourself.
The Condo Corporations’ Deductible
Within these costs is the condo corporation’s deductible. One way condo corporations have lowered their cost is to increase the deductible to a really high amount. The deductible is then split among all affected condo unit owners.
Recently, we have noticed that several condo insurance companies are limiting the amount they give for covering the condo corporation’s deductible. That means while you may have personal condo insurance to cover the deductible cost, the coverage amount may not be enough to cover the full amount.
We recommend you speak with your condo corporation to ensure the deductible does not exceed the amount provided by condo owners insurance. You can have your Scrivens insurance broker review this for you and may be able to offer alternative solutions.
Sign in to Scrivens Online to find your broker's contact information.
Specific Coverages for Your Condo Insurance
If the condo corporation experiences a claim and you don’t have that specific coverage on your condo insurance, your personal policy may not cover the corporation’s deductible.
Example: You own a condo on the 12th floor and it includes a storage unit, but you opted not to purchase sewer back-up insurance coverage.
Your condo building then experiences significant water damage as a result of a sewer back-up loss on the ground floor common area. The condo corporation makes a claim and the deductible is then assessed to all the condo unit owners.
Since you did not purchase sewer backup insurance coverage, your policy will not respond to pay your share of the condo corporation’s deductible.
READ: Insurance Considerations for a Condominium Owner
You should be familiar with your condo corporation’s insurance policy and deductibles to ensure that your personal condo insurance policy will cover this amount. Your Scrivens insurance broker will be happy to review this with you.
Keep Your Condo Corporation’s Policy Details Handy
Each year your condo corporation should provide you with an updated copy of their condominium corporation’s insurance policy. This document should be reviewed and compared with your personal condo insurance policy to ensure that adequate coverage is in place.
As a condo unit owner, you will need to assess the value of your personal belongings and assets. This will determine the amount of coverage you require.
It’s important to have enough coverage to fully replace any damaged property, but it’s also important to not pay too much. Taking a complete inventory of your belongings is an excellent first step to determining the right amount for you.
READ: Create An Effective Home Inventory
A typical condo insurance policy includes the following coverages:
- Additional Living Expense
- Betterments & Improvements
- Contingent Insurance coverage
- Loss Assessment
- Personal Liability
- Liability Loss Assessment
The minimum coverage may be enough for you, but we encourage all of our clients to consider some optional coverages. These are Scrivens’ recommended condo insurance coverage options:
- Condo corporation’s deductible
- Water damage
As you can see, condo insurance coverage is not as straight-forward as a homeowners insurance policy however, it can be just as comprehensive. Please take the time to review your condominium corporation’s bylaws and insurance policy deductibles when you do your personal condo insurance policy check-up.
Take the guesswork away from finding the best condominium insurance coverage by working with a Scrivens insurance broker. Get started with an online condo insurance quote and one of our brokers will contact you to confirm your personal details.