Do you need condo insurance?

Shovelling snow, cutting grass, and cleaning the pool. If you live in a condo, these are all things you can happily forget about. But condo insurance isn’t one of them.

Do you need home insurance for a condo?

Yes, while home insurance isn’t mandatory, if you have a mortgage your lender will require it.

Now, it’s important to know your condo association will have a master insurance policy, but it may only cover the basic building—walls, roof, floors, and elevators—as well as common areas like the lobby and the gym. Other associations will buy a more comprehensive policy that also includes basic items within each unit, such as appliances, carpets, cabinets and interior walls.

Find out what kind of insurance policy your condo association has before you decide what insurance you need for your unit. While the association’s insurance should at least cover the bare bones of your original unit, a personal policy can help make up that shortfall through contingent insurance.

Why you need condo insurance

Renovations

If your association has a more comprehensive master policy, it won’t include any upgrades you’ve made to your unit. So if you bought an expensive Sub-Zero fridge and the fanciest Bosch dishwasher you could find, and both are destroyed in a fire, the master policy won’t cover the difference between your top-of-the-line kitchen and the appliances that came with the unit. If you renovate your condo and put in nicer cabinets, hardwood floors, or upgraded countertops, make sure your insurance company is aware of these changes.

Contents Insurance

If your association has a master policy and you don’t make significant changes to your condo, you still need insurance to protect your furniture, computer, jewelry and other belongings, both in your unit and your locker. If you have any valuables, like a wine collection, expensive jewelry, or a high-priced bicycle, make sure you buy extra contents insurance so they’re protected as well. The extra insurance is known as an endorsement, say you have $10,000 in jewellery, your basic condo insurance may only give you $2,500 back if the jewellery is stolen or destroyed in a fire. You can opt to pay a little more per month to cover the full amount of your contents. Your insurance company may require an audit with receipts and photos as proof that you have the jewellery first.

Additional Living Expenses

Personal condo insurance can help with living expenses (like hotel rooms and restaurant meals if you have to move out of your condo) while it’s being repaired after damage from an insured peril, such as a fire. It can also replace rental income if an insured peril forces your tenant to move out while repairs are being made.

Loss Assessment Coverage

Additionally, condo insurance can help when the association submits a claim for damage to common areas and divides the deductible among all residents. It can also help if you’re responsible for paying the entire deductible. If the sink starts leaking in your sixth-storey unit, for example, and water damage spreads to the units below you, your association might require you to pay for the deductible—which can be as high as $150,000—or even the entire bill.

Contingency Coverage

Some comprehensive condo insurance policies offer contingency coverage, if not, you may want to add it on. Contingency coverage insures your unit on its own protecting you in the event that your condominium or strata corporation’s insurance is insufficient in a major claim.

Third-party Liability Insurance

Personal condo insurance also covers third-party liability issues. Sure, if the mailman slips on the front steps or if a guest gets injured on the pool deck, the association’s insurance will handle any claims. But you still have to consider liability claims from anyone injured while specifically visiting your unit. Insurance can cover their lost wages and medical fees.

Liability insurance also covers you and your family if you damage another person’s property. So if you bump into a neighbour as they move into the building and shatter their new flat-screen TV, your insurance policy would buy them another one.