Condo insurance: What it covers, & why you need it

Today’s homebuyers are a savvy bunch. It's important to know where you stand on all aspects of your purchase, including insurance – which is sometimes misunderstood in the condominium world. Of course, people are used to thinking of home insurance with lowrise residences, but condo insurance is a different animal altogether.

Sometimes buyers assume that maintenance fees include their condo insurance for their individual suites, when in fact, those fees include the insurance that the condominium corporation takes out on the building itself. Usually, the amount is calculated at two per cent of the condo budget. Your declaration will explain what this insurance covers. Read it carefully. This can differ among buildings.

Typically condominium corporations insure from the walls out – the roof, exterior, driveway, underground garage, amenities and other common areas. Coverage is not standard, so it is important to check with the condominium corporation as to whether you are responsible for the deductible on the policy that applies to the building. This can be substantial.

As for your personal condo insurance requirements, think about your suite from the walls in. And this goes beyond contents insurance. Of course you want to insure your belongings, but you also have to insure items like counters, cupboards, vanities and the like. These are considered “attached” elements of the suite, so if anything happens to them, as the owner you are responsible for repairing or replacing them at your cost.

Choose an insurance company with experience in condominium policies. Your condo insurance takes effect when your unit legally closes, but get of a copy of the condominium declaration as early as you can. Show it to your insurance agent, who can help you determine exactly what coverage you need.

Once added up, you may be surprised at the value of your items. You can add a rider to your condo insurance police to cover things like costly jewelry and specialty items. In addition, you should be looking at personal liability insurance to cover your legal liability should someone visiting your suite suffer an injury or loss of property.

For more information on the various types of insurance available, visit the Insurance Bureau of Canada.