There are many assumptions made by condo owners about their insurance and what it covers. Too many of them don’t really understand what is covered and what is not and end up dealing with hassles they would not otherwise have to. For instance, many don’t know that if a flood or a fire starts in their unit, the building’s insurance will not cover the damages to other units. The truth is that condo owners are responsible for these costs and repairs, unless they have the proper personal condo insurance.
Condo insurance is not the same as standard home insurance. The condo corporation’s insurance will cover the building and the common elements, like elevators or front lobby, but the condo owner must insure their own unit, personal items, and protect him or herself against liability if they are found to be responsible for damage caused to a neighbor’s unit.
Most condo associations charge the owners to cover the insurance deductible for the whole community for large claims. The average Canadian condo owner does not know they will be responsible for helping with these costs. In fact, most condo owners do not ask if their condo corporation has ever raised the deductible on their insurance before they move in. Many corporations are increasing their insurance deductibles; meaning condo owners’ liability is also increasing.
Misunderstanding your insurance can have major and expensive consequences. Owners should talk to their insurance broker to make sure they have a policy that covers them completely. Here are some tips to help you avoid costly mistakes and protect what you own:
Ask questions of your condo board or management. They should be able to explain to you what is covered in the building’s insurance policy and what you will need to cover yourself.
Take this information to your insurance broker and figure out what you can do to prevent getting stuck with the bill if your condominium’s policy falls short.
Most of the time a garage or storage area is not considered a common area (even if it is shared) and damage done to your car or belongings in those areas will need to be covered under your personal policy because they will not be under the building’s policy.
Be clear about the different insurance policies and coverage when it comes to your condo unit. Being proactive can save you a great deal of time and money in the long run.