Do Condo Owners Need Insurance?
There are two kinds of insurance when it comes to a condominium.
The first is insurance for the entire condominium building including the suites and the common elements. It includes coverage for interior suite features, such as granite counters, kitchen cabinets, hardwood floors etc IF they were installed originally by the builder. The building insurance covers the replacement or repair of any of these elements due to fire, flood or any other kinds of damage.
But what that insurance doesn’t cover are the condo owner’s property inside the suite in case of fire, smoke or water damage, nor liability if someone in your unit is injured and sues you. It also does not cover any interior improvements you’ve made to the suite such as upgraded hardwood floors and so on. Like any homeowner, condo owners must take out insurance of their own to protect themselves.
But like any insurance policy, a condo insurance policy can have deductibles, which are the owner’s problem even if whatever happened wasn’t their fault. These deductibles can often be between $5,000 and $10,000, and these are repairs you’ll have to partially pay for. This can be a pretty hefty and unexpected expense for any condo owner.
For example, if water pipes inside a wall were to burst and damage your unit, you must pay the deductible before the damages are repaired. The pipes are the responsibility of the condominium, but you may need to prove they were negligent in court and the legal fees are highly likely to be higher than the deductible.
When you are investigating the condominium building insurance, note that a summarized insurance policy for the building is available in the Status Certificate package, and it will outline the deductibles.
Once you have your offer accepted, contact your own insurance company - maybe the one that has your auto policy for example - and ask them to quote you the cost of an condominium owner’s policy. They’ll ask for a list of your contents (furniture, electronics, valuables etc), a description of any suite upgrades from the original and then let you know the premium cost.
Question whether your own policy would cover your condo building insurance deductible in the event there’s an accident like the one described above.
A typical condo owner’s policy costs between $250 to $400 depending on the value of your belongings and any upgrades that your suite has from the ‘builder’s standard finishings’. You can elect to pay the premium all in one payment or spread it out monthly over the year.
Once you’ve decided on the insurance company you want to use, and the coverage that you want, you should ask your insurance broker for a Binder to show that you’ve got coverage once you take possession of your new home.
Thomas Cook
Thomas@LivingInToronto.com
647-962-1650
Keep Up To Date With Toronto's Real Estate Market
Every month we communicate with our readers to give them accurate insights and statistics about what's happening in the Toronto and GTA real estate markets.
Subscribe to our free monthly FYI Newsletter HERE
Here are 5 proven ways to move safely and smartly towards your real estate buying goal...
- Download a free copy of my Ultimate Home Buyer’s Guide book
- Get a custom listings search set up for you and receive targeted listings daily
We can set up your HOMEWatch search for any area you choose (not just downtown Toronto), and you'll get immediate access to homes within minutes of them being listed. Just leave some search criteria here
- Set up a step-by-step plan with the best ways to get to your home buying goal
Our first-time and move-up buyers have told us that being able to meet with us on a casual basis as early in the process as possible, even if their purchase date was 6-12 months away, really worked the best for them.
To arrange your no-obligation Starbucks Strategy Session, click here.
- Join us for a Market Experience Tour - pick your favourite neighbourhoods and price range
The Market Experience Tour is a great way for you to figure out which neighbourhoods and condo buildings are right for you, and you’ll also get a good sense of what’s available in your price range.
Pick the date and time you like to go on your Tour.
- Don’t start your home buying experience on the wrong foot - Meet for a Buyer Consultation first!!
Don’t make the same mistake. Let’s set a time to meet and go over how the complete home buying process works, find out what your likes and dislikes are and what pitfalls you’ll want to avoid, before you seriously start looking for a house or condominium.
This is the best 90 minutes of time you’ll ever spend - set up your private Buyer Consultation.
