When it comes to condo insurance, it can be a little difficult to figure out what kind of policy you should have. In basic terms, condo insurance is necessary to protect your personal belongings and any additional improvements you’ve made to your unit, in case it’s broken into or damaged. It also covers you if someone is injured while visiting. Although condo insurance is not legally required, you will need it to protect yourself.
Why do I need condo insurance?
Most of the time, if you own a condo you pay towards overall building insurance as part of your residential fees. These fees also cover upkeep for communal areas and amenities, so many people find it surprising they need an additional coverage policy. The fact is that while your contribution to the condominium’s overall insurance protects the communal areas - elevators, lobbies, pipes and wiring, as well as the general structure of the building - it does not account for any of your personal belongings. Furthermore, it provides no liability coverage, so if someone is injured when visiting your property, you may be left with a hefty bill.
The exact type of policy you’ll need depends upon your relationship to the unit itself.
If you are a renter
You might assume that your landlord has an insurance policy, and that it covers you. While it’s true that the physical unit is their responsibility to insure, the landlord’s policy will not protect any of your personal belongings.
Consider how much all of your possessions are worth - electronics, clothes, jewellery, artwork, etc. If anything happens to these items, even if it wasn’t your fault, you won’t be reimbursed for them unless you have taken out a renters insurance policy.
Likewise, you may want to consider taking out some coverage for personal and premises liability. This will cover you if you forget to turn off your water, causing a leak that damages a neighbour’s unit, or if someone visiting your condo is accidentally injured.
If you are a condo owner
As a condo owner, you have invested a lot of money in your property. In order to protect both the physical property and your financial security, insurance is absolutely crucial. You are most likely going to foot the bill for any major repairs, in order to keep things running smoothly. This can come as a huge burden if something happens unexpectedly, and although it may not be your fault, it will always be your responsibility.
If you own your condo, and are living in it, your homeowner’s insurance will cover all of your personal possessions, should they be damaged or stolen. You will also be covered in case an accident damages a neighbour's unit, or a visitor is injured on your property.
Many condos offer a private storage locker for their residents, where you can store valuable possessions. Luckily, many condo owner’s policies actually account for the storage locker too, so you can rest assured that all of your stored items are safe.
If you are a landlord
There is a misconception that if you are renting out a unit, it’s up to your tenant to insure themself. While they should have their own renters insurance to protect their personal possessions, you still need to have an insurance policy in place to protect the physical unit.
If you have made any upgrades to the original unit, such as a new floor, kitchen or bathroom, you will need to insure them. Your landlord policy will also take into account any furniture or appliances that you provide for your tenant’s use, just in case they are damaged. You are also responsible for premises liability, if someone is injured while visiting the unit, or your tenant causes damage to a surrounding unit.
Finally, if your unit becomes uninhabitable due to a flood or ongoing construction work, it can leave you out of pocket and put you in a sticky situation. In order to avoid this, it is wise to consider insuring yourself against lost rental income. Many insurers who specialise in condo insurance offer this coverage