It’s also a great option for those who want to downsize from larger homes, only want to be in the city part time, or for those who want to invest in property. Whether you own a unit in a mid-size or high-rise building, or a stacked condo townhouse, you need condominium insurance to protect your home.
Why you need insurance as a condo owner
In a condominium, you own the inside of your unit and what is contained in it such as your appliances, furniture and clothes, and this usually limits your need for insurance to these items. The condominium corporation owns the building, its exterior and common areas such as the parking, swimming pool, gym and more. The corporation has its own insurance policy to cover these areas.
Owning a condominium comes with unique risks so it’s important to have insurance to protect your home and personal belongings. When you have a mortgage, the lender will require you to have insurance to protect their interests.
What does a condo insurance policy cover?
Personal property
This coverage helps pay for loss or damage to the personal property in your unit, garage, storage locker and shed such as clothes, furniture and appliances caused by an insured event.
Example: The water pipe underneath your kitchen sink suddenly burst while you were out for the day and flooded your unit, destroying the cabinet, floors and appliances. This coverage will pay for the repair and replacement of these items.
Tip: You choose the amount of coverage from which your premium is calculated. Make sure that you choose a coverage amount that would sufficiently cover your unit and the upgrades you’ve made, and all your belongings in the event of a total loss. It’s best to review this yearly as the value of your belongings may have changed.
Improvements and betterments
This coverage helps pay for loss or damage to the upgrades you have made to your unit, or those that were existing when you purchased the unit, such as upgraded flooring, cabinetry and more that is caused by an insured event.
Example: You bought a condo in its standard unit description which typically includes stock kitchen cabinetry, floors, etc. Through the years you made several upgrades such as solid wood kitchen cabinetry, quartz kitchen counters and hardwood floors throughout the unit when a fire broke out and destroyed your kitchen. This coverage will repair and restore your unit to its upgraded state and not to the specifications of the standard unit that you originally purchased.
Loss assessment
This coverage pays for your portion of a covered claim made by the condominium corporation for loss or damage to the building’s common areas caused by an insured event.
Example: The party room in your building caught fire and spread to the exterior, causing major damage. The deductible was $100,000 which is shared between the unit owners, amounting to $2,000 each. Your share will be paid by your condo insurance policy.
Tip: Some insurance companies require a copy of the condominium corporation’s policy showing the deductible.
Personal liability
This coverage helps pay for your legal costs if you accidentally hurt someone or damage their property anywhere in the world.
Example: You had a party in your home and a guest slipped and fell and sued you for injuries they sustained. This coverage pays for your legal costs.
Additional living expenses
If you need to leave your condo, such as in the case of a mandatory evacuation order, this coverage helps pay for temporary accommodation and meals.
Example: There is a wildfire in your area and the municipal government has mandated an evacuation. This coverage helps pay for your expenses to temporarily relocate such as hotel room, meals and gas.
Additional coverages for purchase to add to your condo insurance policy for even more protection
Water
A comprehensive condominium insurance policy only covers some types of water damage. It doesn’t cover water damage due to sewer back-up or overland water, which are coverage add-ons that can be purchased.
Umbrella insurance
Also known as personal liability umbrella insurance, is an additional layer of liability coverage that goes beyond the coverage amount of your primary condo, auto, or other personal insurance policies. It provides extra protection for you and your assets in case of significant claims or lawsuits arising from personal injuries or property damage.
Ready to get coverage?
The content on this page is for information only. The insurance products described are subject to terms, conditions, limitations and exclusions that are outlined in the policy wording. Please refer to the policy wording for complete details.