Condominium Insurance – Detailed Information

Condo insurance is required to insure your personal property and any parts of your unit that aren’t covered by your condo association’s master insurance policy.

Your association could have one of three policies: a policy that insures only the primary building and common areas; a policy that insures your building and any items in your unit other than personal property; a policy that insures the building, your unit, and any fixtures or improvements you make to your unit. Be certain that you’re aware which policy the condo association has in place. Ensure your policy covers any gaps in coverage.

When the condominium/association insures the structure, a condo unit owner policy is normally written to cover the unit owner for:

  • Items not covered by the association master policy that may be your insurance responsibility.
  • The value of building additions or alterations made by you, at your expense.
  • Value added (If you’ve put in a better quality carpet than was originally there, for example, this coverage would make up the difference in case of loss).
  • Damage to your unit not compensated because of the master policy deductible.

Condominium Comprehensive Policy:

This is the most inclusive condominium insurance coverage available, and is sometimes referred to an “All Risk Policy.” It covers for all risks except those that have been specifically excluded in the policy documents. An example of such exclusion would be a sewer backup – which is naturally excluded by the policy, but that an individual can purchase additional coverage for to ensure that exclusion has been removed, and coverage will be provided for this type of loss. Coverage’s provided are specially designed for the unique needs of condo owners. The following is generally the coverage provided:

Coverage A – Building Property

Condominium Unit owners policy insures your items of real property, including building additions and alterations, installations or additions which are part of your unit and are your insurance responsibility according to the governing rules of the condominium association. Improvements to your unit as well as fixtures and equipment installed as part of the building may or may not be your insurance responsibility. Association documents should be checked.

Coverage B – Personal Property

This coverage protects personal property in your home like clothes or furniture. It also provides protection for your personal property with you while away from home in many places throughout the world.

Coverage C – Loss of Use

Should a major fire, explosion, tornado or insured catastrophe severely damage your unit, you could need a substitute place to stay. Loss of Use coverage will cover the necessary increase in cost to maintain your standard of living. The amount of coverage is either a dollar value or may be limited to your actual costs for up to a specified time. You should review your limit with your broker.

Coverage D – Loss Assessment

This valuable coverage is uniquely designed for owners in condominiums/ associations. It recognizes the potential for owners to be assessed for certain kinds of loss.

Here are examples of circumstances that might require the condominium/ association to assess all unit owners:

  • Someone is seriously injured on common property (perhaps at a swimming pool) and the courts award a judgement that’s higher than the amount of liability coverage provided by the condominium/association policy.
  • Major damage occurs to commonly owned buildings and it is not fully covered by insurance.

In either case (or other similar cases), loss assessment coverage would pay your share (up to stated amount). You should review the need for this coverage with your broker and buy an appropriate amount of coverage.

Coverage L – Personal Liability

Personal liability coverage protects you if others make a claim or bring suit against you for bodily injury or property damage for which you or a member of your family are responsible, either in your home or elsewhere and to which coverage applies.

In addition to settlement costs, this coverage may pay defence costs and court costs — even if a suit brought against you is groundless. It is essential that you select liability limits high enough to protect your assets.

Named Perils or Broad Form Policy:

If you are looking to save money by carrying the financial risk of some losses yourself, you may wish to consider a named perils policy that covers only those perils that are specifically stated in the policy. This coverage is only on perils named in the policy such as those listed below. This makes the policy more affordable but puts more risk on the condo owner.

  • Air and vehicle impact
  • Electrical current
  • Escape of fuel oil
  • Explosion
  • Falling object
  • Fire
  • Lightning
  • Riot or civil disturbance
  • Smoke
  • Theft
  • Transportation
  • Vandalism
  • Water Damage
  • Wind and Hail

*this may vary from policy-to-policy.

Remember, not all companies have identical tenant insurance options. And many use brand names with variations of coverage. So check your policy carefully.

Coverage included with this policy are the following:

Coverage A – Building Property

Condominium Unit owners policy insures your items of real property, including building additions and alterations, installations or additions which are part of your unit and are your insurance responsibility according to the governing rules of the condominium association. Improvements to your unit as well as fixtures and equipment installed as part of the building may or may not be your insurance responsibility. Association documents should be checked.

Coverage B – Personal Property

This coverage protects personal property in your home like clothes or furniture. It also provides protection for your personal property with you while away from home in many places throughout the world.

Coverage C – Loss of Use

Should a major fire, explosion, tornado or insured catastrophe severely damage your unit, you could need a substitute place to stay. Loss of Use coverage will cover the necessary increase in cost to maintain your standard of living. The amount of coverage is either a dollar value or may be limited to your actual costs for up to a specified time. You should review your limit with your broker.

Coverage D – Loss Assessment

This valuable coverage is uniquely designed for owners in condominiums/ associations. It recognizes the potential for owners to be assessed for certain kinds of loss.

Here are examples of circumstances that might require the condominium/ association to assess all unit owners:

  • Someone is seriously injured on common property (perhaps at a swimming pool) and the courts award a judgement that’s higher than the amount of liability coverage provided by the condominium/association policy.
  • Major damage occurs to commonly owned buildings and it is not fully covered by insurance.

In either case (or other similar cases), loss assessment coverage would pay your share (up to stated amount). You should review the need for this coverage with your broker and buy an appropriate amount of coverage.

Coverage L – Personal Liability

Personal liability coverage protects you if others make a claim or bring suit against you for bodily injury or property damage for which you or a member of your family are responsible, either in your home or elsewhere and to which coverage applies.

In addition to settlement costs, this coverage may pay defence costs and court costs — even if a suit brought against you is groundless. It is essential that you select liability limits high enough to protect your assets.