Considerations for condo and town house owners

Whether you live in a house or a condo, your condo insurance needs for personal property, additional living expenses and liability protection are very similar. That said; there are a few insurance considerations that are unique to condo owners.

Condo improvements, fixtures, and glass

Your condo corporation (through the condo board or strata council) is responsible for buying insurance on the condo building. This insurance is based on the specifications of the building as it was originally constructed. That means any upgrades you (or any previous owner) may have made to your unit, like hardwood floors and/or granite countertops, are not covered by the condo corporation’s policy.

You’re responsible for insuring the cost of any improvements that have been made to your unit. You can do this easily with Square One’s Condo Owner’s Protection, which gives you the option to insure all condo-specific coverages — including not only improvements but also fixtures, glass and so on — with you deciding just how far you want your coverage to extend. Without this coverage, any damage that may occur to your unit will most likely be repaired to the original specifications of the building. For example, if your hardwood floors were damaged by a burst pipe, your condo corporation’s insurance would simply install the original flooring, which was likely carpet.

Other types of unit improvements that are commonly made, and which you may want to protect, include the installation of wallpaper, crown mouldings, baseboards, closet organizers and specialty lights or faucets.

In some cases, condo corporations’ policies do not insure the countertops, fixtures, flooring or glass in your unit. Fixtures would include any permanently installed lights, window coverings, etc. Check your bylaws to determine exactly what you are responsible to insure.

Condo corporation assesses you for a portion of their property deductible

You may have heard of condo property deductible assessments, but you may be unclear what they are. As mentioned earlier, condo corporations carry insurance policies on condo buildings. These policies protect against damage from fire, water, earthquake, etc. As with most types of insurance, the condo corporation’s policy will contain a deductible.

As a unit owner, if the building suffers a loss, the condo corporation may assess each unit owner a portion of the deductible. And, in some cases, the condo corporation may assess the entire deductible to a single unit owner (more on this in a second.) Any amount assessed against you will come out of your pocket, unless you’ve bought the right coverage. At Square One, our Condo Owner’s Protection can be added to your condo policy. Then, if you are assessed a portion of the condo corporation’s property insurance deductible for a type of loss covered by your policy, you will be covered up to the limit you’ve selected.

It’s always best to make sure you have the broadest form of insurance available. In cases where the loss arises from something in your unit or because of your actions, you could be responsible for the entire deductible. For example, let’s say a pipe bursts behind one of the walls in your unit. While there was likely nothing you could have done to prevent it, your condo corporation may determine that you are responsible as the damage came from your unit.

Depending on your building, the condo corporation’s deductible could range from $2,500 to $50,000. In some cases, the condo corporation’s deductible could be even higher. Check your condo corporation’s annual general meeting minutes or contact your council to find out what your deductible is. There may be different deductibles based on the type of loss. Typically, the deductibles for water and earthquake losses are higher than that for fire losses. Be sure your condo owner policy includes protection for condo property deductible assessments and that your limit is sufficient.

Condo corporation carries insufficient property insurance

Your condo corporation may make an assessment against each unit owner if they do not have sufficient insurance to repair damage to the condo building. This may happen from time-to-time, particularly when construction costs are rising rapidly. In these situations, your condo corporation will assess each individual unit owner their portion of the shortfall.

Our Condo Owner’s Protection is available to protect you against these assessments up to $250,000.

Condo corporation opts not to put in a claim

There are times when condo corporations are reluctant to put in a claim with their insurance company, as they don’t want their rates to go up. If there has been a loss which has caused damage to your unit, you may be left high and dry. If the damage is to the original structure of the building (not improvements that you’ve made) your condo unit owner’s policy may not cover it, as it should be covered by the condo corporation’s building policy. In order to close this gap in coverage, our Condo Owner’s Protection can step in. This will also protect you if the type of loss to your unit is not covered by the condo corporation’s policy, but it is covered by your policy.

Adding this coverage also grants access to Condo Concierge Services, through which Square One provides personalized, hands-on assistance reviewing and interpreting your condo corporation’s property insurance. With this tool, you can get professional experts’ advice on any areas of concerning differentiation between your policy and that of your condo corporation and know exactly the right amount of personal property coverage you’ll need to keep your belongings safe.

Condo corporation has insufficient liability insurance

If you live in a condo building, there is always the danger of a visitor being injured on the common property, such as someone slipping on the icy sidewalk or wet floor tiles. If they’re seriously injured and sue the condo corporation, your condo corporation’s insurance will normally respond. If the injured party is awarded an amount higher than the limit of insurance carried by the condo corporation, then assessments will be made against the individual unit owners.

To protect yourself against liability-related assessments, you need condo liability damage assessment protection on your condo owner policy. With some companies, you’ll need to pay extra for this coverage, but with Square One, this coverage is automatically included. Should you find yourself in a conflict with your condo association over liability concerns, repairs or other issues, Square One’s Condo Owner’s Protection is here to help. This service will provide you with unlimited access to a confidential legal advisory helpline, offering access to lawyers to help guide you in any personal (non-automobile related) legal or tax problem across Canada.

Personal property

When you purchased your condo, it likely included appliances. In fact, most new condo developers include an appliance package in the purchase price. That said; your condo corporation is not required, nor is it likely, to insure any appliances in your unit. As such, you should be sure to include the total value to replace your appliance in your personal property limit.

If you have any questions about the protection you need as a condo owner, feel free to contact Square One at 1.855.331.6933.


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