Condominium Insurance (2019)

August 2019

Communities maintain insurance to protect against certain events with policies varying in terms of cost, coverage and deductibles.  Most certainly, these policies do not protect contents of individual suites against damage or theft.  Understanding the policy maintained by the condo corporation is necessary to determine what type of insurance may be appropriate for residents.

Insure your Personal Property

Personal property generally refers to anything inside the walls of a condo suite from clothing and jewelry to electronics, furniture, fixtures and artwork.  It may include personal possessions of family members studying away from home, travelling or in a healthcare facility.

Insurance costs more when you have more valuable assets.  It is advisable to undertake an annual inventory of all assets inclusive of appliances and suite upgrades – floors, cabinets and fixtures.

Additional living expenses covering a temporary living situation can be helpful.  Should a fire or flood in your building make your home uninhabitable for a period of time, temporary living expenses can be expensive.

Third Party Liability

You are expected to be responsible in your living habits and protect against damage.  Damage, perhaps because you forgot to turn off a faucet or check the stove, or theft if you fail to lock a door,  may not be covered under an insurance policy.  You could be held responsible for water damage to a neighbouring suite because of your failure to live responsibly.

Natural Disaster Inflicted Water Damage

Water damage, the primary reason for insurance claims in Canada, is not automatically covered by insurance.  Summer storms causing water levels to rise can cause major flooding.  Many insurance plans do not provide coverage in the event of flood, fire, tornado, earthquake or even sewer backup.  This coverage needs to be purchased at additional cost.

Replacement Cost and Actual Cash Value

Insurance coverage at replacement cost means coverage is for the total value.  It does not take depreciation into account meaning that you recover the entire cost of your lost or damaged items.

Actual cash value coverage is cheaper.  In the event of loss or damage, these plans take depreciation into account.  That damaged television set or computer system will cost more to replace than what you receive from the insurance company.

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