You may think that because your condo is your family’s “home” you don’t need different insurance. This isn’t true – with a condo, you only own the unit where you and your family live and all of its contents. The rest of the building is shared. Your condo corporation has a policy to cover the external structure of the condo building and any communal spaces, but what about the rest? It can be confusing – and you don’t have all day to become an expert in insurance.
In this blog, we’ll lay out for you the basics of condo insurance in Ontario so that both you and your family can rest easy knowing you can make the best decisions possible.
What is Condo Insurance?
Personal condo insurance in Ontario (i.e: the condo insurance that the unit owner would purchase to protect their liability and personal belongings) is not mandatory, but many lenders will require it if you carry a mortgage. If not, it’s still highly recommended to protect yourself. This will cover what your condo association’s policy does not, such as:
- Your liability (if you’re sued, whether or not the claim is legitimate or if you were in your unit at the time of the incident.)
- Personal belongings (even the things in your storage locker, if something happens to them!)
- Special coverage (for any improvements or modifications you’ve made, and also if your corporation’s insurance isn’t enough to repair any damages to your unit)
- Additional expenses following a loss (if you need to live elsewhere for a period of time and require living expenses until your unit is habitable again)
- Loss assessment (if a claim exceeds your condo corporation’s policy limits and you and other unit owners are liable for the remainder)
Condo corporations already have insurance, but many will lower their overall expenses by limiting the coverage to the building. This means that if an event occurred where a claim needed to be made you, as the unit owner, may be left hanging if the damages exceed the corporation’s policy limits.
Your condo corporation’s insurance will likely cover:
- Liability, if someone is injured in common space to cover any legal costs or medical expenses that may arise as a result of the incident.
- Property damage, if a fire breaks out, if there is theft, or another covered peril occurs to the outdoor spaces, common areas, elevators, lobby, etc. – this would pay for any replacements or repairs necessary.
Your condo corporation’s policy is also subject to a deductible. A deductible is the amount that needs to be paid before the insurance carrier steps in to cover the rest. In the case of your condo corporation’s insurance, you could be responsible if a claim needs to be made, depending on the by-laws and who is considered “at-fault” or responsible for the damages. If you have personal condo insurance in Ontario, you may be covered for this amount.
Your personal condo insurance is also subject to a deductible, but this is an amount that you can choose. You will want to ensure that the amount you choose is within reason. Keep in mind that this number will also influence your rates – the lower the deductible, the higher the rates (and vice versa).
What is included with personal Condo Insurance?
Again, condo insurance is not required by any law (but evidence may be necessary if you have a mortgage!) however it is highly recommended that you take the necessary steps to protect you and your family. It is also incredibly affordable compared to your standard homeowner’s insurance, and condo insurance in Ontario can cost as low as $30/month. It’s a wise investment to have, especially considering the potential costs that could come from a lawsuit or other peril.
You may have the following coverages included with your personal condo insurance in Ontario, or have the option to purchase them:
Loss Assessment and Loss Assessment Liability Coverage
Your condo corporation is responsible for insuring communal spaces and the overall exterior of the condo. This means you may not have the opportunity to fully protect yourself if you don’t choose coverage fitted to the part of the building that you are liable for.
Loss assessment can cover costs that exceed your condo corporation’s policy limits. A loss assessment policy can allow you to claim the total you needed to pay and can protect you from low limits on your condo corporation policy that you would not otherwise have control over.
Improvement & Betterment Coverage
In the province of Ontario, every condo corporation is allowed to define what they perceive as “a standard” unit – and if you’ve recently updated your condo (for instance, completed a $35,000 renovation for your kitchen!) this may not be covered should there be a total loss.
When you purchase your family’s personal condo insurance you will want to know what your condo corporation coverage generally will exclude so that you aren’t paying for any coverage you don’t require, and so that you aren’t under insured. Moreover, improvement & betterment coverage can include any investments or modifications you have made that exceed your “standard unit” coverage.
Living Expense Coverage
When something happens that doesn’t just involve personal property damage, condo insurance claims can get confusing because at least 2 policies will be involved: your condo corporation’s insurance and your personal insurance. Worse, if you were liable, there could be policies – and this process can take months and months to be straightened out. This is where living expense coverage can step in to help you and your family out during this difficult time.
Take, for example, this scenario: your neighbour’s condo catches on fire, and there’s a significant amount of damages to your condo as well. Unfortunately, you and your family are forced to evacuate. Your living expense coverage you can move to a comparable dwelling (paid for by your insurance) while your provider determines how to get you the reimbursement you require for your property and your unit is being repaired.
To evaluate your coverage options or to book an appointment to look at your condo corporation’s policy with an Excalibur expert, call us at 1-(888)-298-7343.