Do You Need Insurance for Your Condominium?

By Lesley Green
An aerial photo of a low-rise condomium with balconies for every unit and a blue roof.

True or false? Your condo corporation’s insurance policy provides coverage for you and your unit.

Condominiums are a popular choice for anyone in the market to buy a new place. For young people just starting out, it’s a great way to get on the real estate ladder. For older people, it’s an excellent choice when looking to minimize house care and maintenance.

According to Statistics Canada, prior to 1980 only 6% of new dwellings built were condominiums. But in the decades since, the construction of these homes has shown no signs of slowing down and there’s no reason to think their popularity will wane.

Period of Construction Percentage of New Builds
1981 to 1990 14%
1991 to 2000 18%
2001 to 2010 24%
2011 to 2016 (the last Census) 33%

Yet, despite their popularity, there seems to be some confusion about the condo insurance needed by the unit’s owners for these types of properties.

A recent Insurance Bureau of Canada (IBC) survey found one in five (19%) of condo owners in Quebec did not know the condo building itself and the individual units are covered by two different insurance policies:

  1. The condo corporation’s commercial insurance policy (or the syndicate’s policy if you live in Quebec)
  2. As well as the resident’s personal property insurance policy

It’s safe to say, however, these survey results are not unique to residents of Quebec. There’s likely confusion by condo owners across the country.

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What’s the difference between the two policies?

There is not one difference between the two policies but many. What separates the two is probably best described as being determined by who owns what and who is largely responsible for what happens inside or outside everyone’s unit.

The condominium corporation’s policy, for example, would provide coverage for insured damages to common areas like walkways, the parking garage, rooftop patio, party room, library, swimming pool, fitness room, hallways, foyer, stairwells, and elevators – basically, the building itself but not the individual units within. Your insurance policy would provide coverage for everything you own – your possessions and valuables – from what’s in your living room to your bathroom and everything in between (as well as what’s in your storage locker).

Then there’s the liability component of the two policies.

The building’s policy would provide coverage (if sued) for damages or injuries caused due to activities the corporation is responsible for overseeing. For example, if someone were to slip and fall on an outside walkway that was poorly maintained in the winter. Or if someone fell down the stairs and there was no handrail for added safety.

Your personal policy, in contrast, would provide coverage if sued for things that are reasonably within your control. For example, if someone slipped in your bathroom because the floor was still wet from your morning shower, or if a fire in your home from a cooking mishap caused damage to your neighbour’s unit next door.

There are, of course, a million and one different ways something could go wrong, and these are only a couple of examples. However, for the question initially posed: “True or false? Your condo corporation’s insurance policy provides coverage for you and your unit”, the answer is false. The condo corporation’s policy does not provide you with all the protection you need.

What does a resident’s condo insurance cover?

According to IBC, a unit owner’s condo insurance policy typically provides coverage for:

  • The personal property of the unit’s owner and family, including clothing, appliances, and furniture.
  • Personal liability for injuries or damages mistakenly caused.
  • Upgrades to the home that have been undertaken by yourself or previous owners.
  • Contingency coverage for certain parts of your unit – like the walls, subfloor, windows, and plumbing – should the corporation’s insurance coverage be lacking.
  • Loss assessment coverage for big-time property and liability losses on common property that may exceed the corporation’s policy limits (think major fire or water damage that spans several floors). This coverage may also protect you financially if it is found you’re the reason, inadvertently, for the damages caused. In a situation like this, you may be on the hook to pay the deductible for the corporation’s policy which can be as high as $10,000 to $25,000 or more.

If you own and live in a condo, it’s essential you protect your investment with condo insurance. It’s the only way to take care of your specific interests.