What Does Condo Insurance Cover?

Moving into a condo is an exciting milestone that many Canadians experience every day. Amidst all the packing and decorating, there's one essential item you shouldn't overlook purchasing: condo insurance. If you've ever been unsure about what this type of insurance covers or why you need it, you're not alone. In this blog, we'll clear up the confusion, explain key coverage details, and answer common questions to help you make informed decisions.

Please Note: This blog provides a general overview of condo insurance. It is not all-encompassing and should not be taken as specific advice. Be sure to discuss your unique circumstances with a licenced insurance broker to ensure your policy aligns with your needs.

What Is Condo Insurance and What Does It Cover?

Condo insurance, also known as condominium insurance, is a type of coverage designed to protect condo owners from unexpected events that could cause damage to their property or result in liability claims. Unlike homeowners insurance, which covers the entire structure of a house, condo insurance typically focuses on the interior of your unit and any improvements you've made. Condo insurance generally includes the following types of coverage:

• Personal Property: Protects your belongings, such as furniture, electronics, and clothing, from covered events like fire, theft, or water damage.
• Unit Improvements: This covers upgrades you've made to the interior of your condo, such as custom flooring, high-end countertops, or new cabinets.
• Personal Liability: Provides protection if someone is injured in your condo or if you accidentally cause damage to another person's property.
• Additional Living Expenses: Helps cover the cost of temporary living arrangements if your condo becomes uninhabitable due to a covered event.
• Loss Assessment: Offers coverage for shared expenses if your condo association issues a special assessment to repair common areas after an incident like a fire or vandalism.

 

Doesn’t My Condo Provide Insurance For Me?

While your condo association does have insurance, it likely doesn’t provide complete coverage for your personal needs. Typically, the condo corporation’s insurance policy, known as a master policy, covers the building's structure, common areas (like hallways, lobbies, and amenities), and sometimes the standard finishes within your unit.

With this in mind, having condo insurance is essential to protect your personal property, liability, and any upgrades you've made to your unit. Without it, you could be left paying out of pocket to restore those upgrades in your unit or replace damaged contents such as furniture, electronics, clothing, and so on.

Make sure that you review your condo corporation's master policy so that you can understand what is covered by them and what you are responsible for insuring.

What Does Condo Insurance Cover?: Betterments & Improvements

When you or previous owners have made upgrades to the unit (e.g. installing fancy light fixtures, hardwood flooring, high-end cabinets), Betterments & Improvements coverage on a personal condo policy can help cover the costs associated with repairing or replacing items of like kind and quality. It would help pay the difference not covered by your condo corporation’s insurance policy.  

Example 1: You have a grease fire in your kitchen that damages your custom built-in cabinets. Your condo corporation’s insurance would likely only provide standard cabinets, not upgraded ones. Betterments & Improvements coverage will help you to replace the cabinets with new, upgraded ones of like kind and quality.

Example 2: Your freshly renovated bathroom floods and damages the flooring and fixtures. Your condo corporation insurance might only replace the bathroom with standard fixtures and floors. With Betterments & Improvements coverage, you would receive the money needed to restore your bathroom to its renovated state.

A BIG broker can help you decide on the right policy limit for Betterments & Improvements coverage. Whenever you make upgrades to your condo, you should always contact us to make sure you still have the appropriate coverage. Keep a record of any receipts or proof of upgrades and store them in a secure location in case you need to make a claim.

What Does Condo Insurance Cover?: Your Personal Belongings

From furniture and electronics to clothing and hobby equipment, you've likely accumulated a lot of valuable possessions. Unfortunately, your condo corporation’s insurance won’t cover any of these personal items. That’s where contents coverage from a condo insurance policy comes in - it helps cover damaged or stolen belongings after a covered event.

To determine the right coverage amount, start by estimating the replacement costs for big-ticket items like appliances, electronics, and furniture. Don't forget to account for smaller items over time. If you own special collections such as fine jewelry, artwork, or high-end sporting equipment, your broker may recommend additional or specialized coverage to ensure complete protection.

What Does Condo Insurance Cover?: Personal Liability

Accidents can happen, and when they do, the financial consequences can be significant. That’s why personal liability coverage is a key component of a condo insurance policy. This coverage protects you if you're held responsible for unintentional injuries to visitors or damage to other units, such as from a fire or water leak originating in your condo.
Liability coverage helps pay for legal fees and settlements if you're sued. Most policies start at $1 million in coverage, but you can increase it to $2 million or more for added protection and a modest increase in your premium.

What Does Condo Insurance Cover?: Additional Living Expenses

If a covered event makes your condo temporarily unlivable, finding a place to stay can be both stressful and expensive. That’s where Additional Living Expenses (ALE) coverage comes in. This part of your condo insurance helps cover the cost of temporary accommodations, meals, and other necessary expenses while your unit is being repaired or, in severe cases, while you look for a new home.

The amount covered depends on your policy limits, so it’s important to review your coverage to ensure you have enough financial protection in case of an unexpected displacement.

What Does Condo Insurance Cover?: Loss Assessment

In some cases, your condo corporation might issue a special assessment to cover expenses related to damages or liability claims that exceed the limits of the master insurance policy. These assessments can arise from incidents affecting shared areas, like repairing the roof after a severe storm, fixing damage from a fire, or covering legal costs related to accidents occurring in common spaces.
Loss Assessment coverage in your condo insurance policy helps protect you from having to pay out-of-pocket for these shared expenses. For example, if the condo corporation’s insurance falls short of covering the full cost of repairs to a common area, the remaining amount could be divided among all unit owners. With Loss Assessment coverage, your condo insurance would help cover your portion of that cost.

Protect Your Condo With BIG

Just like any home, your condo is more than just a place to live - it’s an investment worth protecting. When you secure a condo insurance policy, you gain access to a wide range of coverages that will offer protection for you and your belongings. If you need expert advice regarding your coverage options, request a condo insurance quote or reach out to a BIG broker today! Our experienced brokers will take the time to understand your situation and review your needs so that you have the right coverage.