Ask a Broker about Condominium Insurance
Many people have discovered the attractions of condominium living, with its
convenience, lower maintenance demands and security benefits. No more shovelling,
mowing or begging a neighbour to water the garden while you’re away. Home
insurance will not be a new subject for most, but those down-sizing from the
family home will need to familiarize themselves with the special insurance needs
of this kind of residence.
All condominium corporations are required to carry the requisite insurance with
respect to risks associated with the “common” areas in the building
such as the external building and surrounding property, corridors, reception
areas, stairs, social rooms, gymnasium, pool or the roof. This coverage also
applies to “exclusive use” areas such as balconies and garage spaces.
You will of course still need to insure the contents of your condominium, and
cover yourself for all liability within your individual unit. A move to a condominium
usually requires a significant editing of possessions, so it’s a good
time to do a thorough audit. Take a room-by-room inventory (there’s a
form at www.ibac.ca or if you
prefer to do it electronically there is software available at http://www.knowyourstuff.org/ibc/).
Make sure to store your inventory lists somewhere safe, so you’ll be able
to retrieve them if you ever need to.
Many people spend extra money to upgrade their flooring or make kitchen, bathroom
and other improvements. The condominium corporation will likely have adopted
a “Standard Unit” bylaw, describing what will be covered by the
corporation’s insurance in case of a claim. Any upgrades will need to
be covered through Owners Improvement Coverage within your own policy, to ensure
replacement of these higher specification items in the event of an incident.
Pay particular attention to the “Standard Unit” bylaw if you have
bought a pre-owned or existing unit and are not sure what improvements and betterments
have been made.
Many condominium owners do not realize that they will become liable if the condominium’s
insurance proves to be insufficient in the event of a lawsuit, or to cover replacement
of a common area asset. As each unit owner shares responsibility for common
property, you would be required to make up the difference through a Special
Assessment. Check also to see whether the condo corporation bylaws make you
responsible for paying the full amount of any deductible should a loss originate
inside your unit.
A good broker will recommend a Loss Assessment rider on your personal
coverage and ensure that it is sufficient to cover your portion of any short-fall
and thus protect you from an out-of-the-blue expense.
The risk of unintentional injury to others while in your home should be covered
by the Personal Liability provisions of your condominium insurance, as well
as protecting you from the financial risk of bodily injury caused to others
while away from home. It also protects you from claims for damage unintentionally
caused by you to someone else’s property, not only in or around your condominium
but anywhere in the world.
Peace of mind, like most things in life, comes from knowing. For answers to
all your condominium insurance questions ask your local insurance broker. They’ll
be happy to share their experience and knowledge with you, without obligation.