Condo insurance is purchased to protect your personal belongings and any improvements that have been made to your unit, in addition to protecting you in case you damage any of the other units or if someone gets hurt while visiting your unit. While insuring your condo is not mandatory, it is definitely something to strongly consider to keep yourself and your belongings protected. If you are interested in protecting your property, you can get a condo insurance quote here.
Do I need Condo Insurance?
A common question that comes up around condo insurance is why does a separate insurance policy need to be purchased when the condominium building overall already has insurance? Here’s the difference — a building insurance policy (commonly called the shared insurance policy) typically only covers the common areas, such as the lobby, elevators, and gym, but does not cover an owner’s personal belongings. So while it is possible that the areas and things around and outside of your unit benefit from coverage under the shared insurance policy, personal belongings inside your unit along with improvements you’ve made to the unit are not covered by the shared insurance policy. In addition, the shared insurance policy does not provide any liability coverage and therefore will not protect you against any claims made against you personally.
On top of the usual reasons you need insurance (to protect your financial security), as a condo owner you could be responsible for any major repairs. That’s because condominium declarations will often have rules in them that stipulate that if the loss began in your unit (example, if a pipe bursts in your apartment and spreads to other units) you could be responsible for the entire shared insurance policy deductible (which could be in the tens of thousands of dollars) and possibly even some of the cost to repair the damage. Your own insurance policy can help provide protection against this expense. Figuring out what kind of condo insurance you need can be complicated, but with TD Insurance, we can help you tailor an insurance package that meets your individual needs.
What Does Condo Insurance Cover?
A condo insurance policy can provide protection against a number of things. Some of them include:
All-Risk covers the contents in your unit along with improvements and betterments made to your unit from losses due to the widest range of perils (or risks), unless specifically excluded from your policy like intentional damage
Personal Liability insurance protects you for unintentionally injuring someone or damaging their property and having to pay damages (example: someone has a slip and fall in your unit, breaks his/her leg and now cannot work for a period of time)
Contents Insurance covers your belongings (including when you travel) for losses resulting from the most common types of perils (or risks) up to a specified amount
Replacement Cost Coverage means that the contents of your condo are insured for the amount it costs to replace them without depreciation
Additional Living Expenses Coverage will help you pay for reasonable and necessary expenses (like hotel and food costs) in the situation you are forced to leave your condo following an insured peril (or risk) for a period of time
Improvements and Betterments Protection covers you for any upgrades you’ve put into your condominium (including upgrades completed by a previous owner), on top of what the building originally provided for you, up to the limit of the replacement value. For example, if your unit was originally finished with a medium-grade carpet valued at $5,000, and then you upgrade it to a high quality carpet valued at $10,000, the Improvements and Betterments protection will ensure you receive the full value of your new carpet in the event of a loss.
Loss Assessment is when you share responsibility with others for common property. With Loss Assessment, your insurer will pay, up to a stipulated limit, your portion of any loss to common property caused by a peril you are insured for.
You should also be aware of what the condo association’s shared insurance policy covers. If you own a condo, typically you only own the individual unit outright, and then have a shared ownership of the rest of the condominium building. From an insurance point of view, that means that you have a shared responsibility for insuring the common areas of the condominium. Normally, the cost of this building insurance is a portion of your condo fees. The condo association’s shared insurance policy, as well as the association declarations, should clearly spell out which parts of the complex are insured through your association dues, and which parts are not.
Is the average condo insurance cost higher if I live in a city like Toronto or Vancouver?
Just like home insurance, one of the determining factors of your insurance premium will be the location of where you reside. So while we cannot definitely say that insuring your condo will cost more in a major city, it is one of many factors that is taken into account when your premium is calculated. Some of the other factors that determine what your premium is can include:
Age of condominium building
Value of your personal belongings
Leasehold improvements – How much have you spent upgrading your unit? If there was a previous owner, how much did they spend upgrading the unit?
Any past claims
Why is Loss Assessment Coverage Important?
Loss Assessment coverage is an important feature of condominium insurance because you equally share in the responsibility with the other condo owners for the condominium building. That means that if there is a special assessment for your condominium building, all the condo owners have to split the cost of the assessment.
What about my storage locker, is that covered by Condo Insurance?
If you have any belongings stored in your condominium locker for safekeeping, make sure to let us know. If your locker is owned as a separate unit, you must disclose this to us to ensure that the locker and all the contents inside are properly protected.
How do I get my Condo insured?
Start by completing a quote online. In most instances, we will be able to instantly provide you with a condo insurance quote. To complete your purchase, you can call us and speak to a TD Insurance Advisor who will walk through your quote with you, including looking for any further opportunities to save on your premium.
WHAT DOES CONDO INSURANCE COVER?
Condo insurance typically includes a few standard coverages to help protect you, your condo unit and your belongings. Here’s a look at how these coverages work:
Personal Liability Coverage
If someone is accidentally injured while visiting your condo and you are at fault, this coverage may help you pay for related legal expenses or your guest’s resulting medical bills.
Guest Medical Coverage
If a guest is injured at your home, guest medical coverage may help pay for related medical expenses even if you are not at fault.
Building Property Protection
This type of coverage typically helps pay for repairs to the walls of your condo unit and its interior, which could include items such as built-in bookcases and fixtures, if damage is caused by a covered peril.
Personal Property Coverage
Belongings such as electronics, appliances, furniture and clothing are typically included under personal property coverage. If they are stolen or damaged in a covered claim, this coverage may help pay to repair or replace them.
Condo owners can typically choose from different types of personal property coverage, which determine how much your policy will reimburse you after a covered loss. They include:
Actual cash value, which typically pays you for the depreciated value of your damaged belongings.
Replacement cost coverage, which does not take depreciation into account. This coverage helps reimburse you for the difference between the actual cash value of your belongings and what you paid to repair or replace them.
Keep in mind that each coverage comes with a limit, which is the maximum amount you can be reimbursed for a covered claim. You may also need to pay a deductible before your coverage kicks in.
A man talking on a phone.
YOU CAN COUNT ON A LOCAL AGENT.
An Allstate agent can answer coverage questions and help you find ways to protect what matters most.
CONDO ASSOCIATION COVERAGE
It’s also important to understand what is covered by your condo association’s insurance policy, sometimes referred to as the master policy. Your association’s policy may help cover areas such as the boiler room and the roof, as well as hallways and other shared spaces, including the common rooms and swimming pool.
In some cases, the master policy may cover the structure of your own condo unit, including the walls and the floors, the III says. Other master policies might provide coverage for your unit’s original construction and fixtures, while others might cover only bare walls, ceilings and floors, according to the III. The terms of the master policy can affect your own insurance coverage of the unit. It’s a good idea to brush up on what protection your condo association has in place so that you know what types of coverage your personal policy should provide.
Keep in mind there are many condo associations in the U.S., allowing for plenty of variations in insurance policies. The III suggests reading your association’s bylaws to learn what parts of your home are covered by the master policy and which parts you will need to insure on your own.
Many insurance providers offer optional coverage you can purchase for occurrences not covered by a standard condo insurance policy. For instance:
Loss Assessment Coverage
If your condo association issues a special assessment, in some cases this coverage may help cover your share. For example, if a fire damages a common area, this coverage may help pay for your part of the bill.
Flood damage is typically not covered by a standard condo policy. Most flood insurance policies are issued through the National Flood Insurance Program. In some cases, you may even be required by your mortgage lender to purchase flood insurance, according to the program.
For additional liability protection, you may want to consider investing in a separate personal umbrella policy. This kind of policy goes into effect when you reach the limit of your condo’s liability coverage and can help you pay for large liability claims or judgments. It may also help provide coverage if you are sued for libel or slander.
Additional personal property coverage, such as scheduled personal property, is typically available for an additional cost. For example, while a standard condo policy typically caps coverage for theft of jewelry at $1,000 or $2,000, scheduled personal property coverage may provide additional coverage for those items. Scheduled personal property also typically provides coverage for additional risks.
When it comes to insurance for your condo unit, you should make sure you have the coverage that fits your needs. Your local agent can help you tailor a condo insurance policy that’s right for you.