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Condominium Insurance — Why You Need It – Dec/Jan2016

Condominium Insurance — Why You Need It - Dec/Jan2016

Condominium living is often synonymous with living a more carefree, low maintenance lifestyle.

That’s why there are condo fees, to cover things like lawn maintenance, window cleaning, snow shovelling and general repairs. You know, the stuff freehold homeowners worry about on a day-to-day basis. But this relaxed lifestyle should not mean condo owners ignore some necessities in life, like making sure one of their biggest assets has proper insurance. Personal insurance is still an important part of homeownership when you live in a condo.

What experts say

According to the website insureye.com, an authority on all things insurance in Canada, the average condo insurance policy in Canada costs between $25 to $33 a month. But cost isn’t the only consideration. A recent survey by Allstate shows that most Canadians planning to buy a condo were unclear about what insurance protection they need to purchase.

Condo insurance is different

For those downsizing from a home it’s important to note the difference between the types of insurance you’re getting to protect your property. Insureye.com says the main difference is that there are two components of insurance protection for a condo, a commercial condo policy and personal condo insurance purchased by unit owners.

A commercial condo policy cost is usually covered in a unit owner’s maintenance fee. It protects the condo building itself, including common areas located both inside and outside of the condo building. This includes shared hallways, entrance/foyer area, swimming pool, gym, elevators, roof, etc.

A personal condo policy is different. It protects the financial interests of individual unit owners, including any unit improvements you have made and your personal property. The problem is many unit owners don’t buy personal condo coverage as they mistakenly believe they’re covered under the commercial condo policy.

With a personal condo policy coverage can include:

Upgrades you made to your unit, including hardwood floors, new cabinets or countertops, crown moulding, and wallcoverings. Insureye says some condo corporations have passed bylaws making unit owners responsible for all flooring materials and countertops in their units, regardless of whether or not they were upgrades or improvements. They say coverage limits for upgrades usually start at $2,500.

Personal contents — everything you bring into the unit, including furniture, electronics, household goods, and clothing — can only be insured under a personal policy. Insureye says with most policies, you can choose a limit that starts at $20,000 and goes as high as you need. This can also cover theft from your unit and your locker. Third party liability. You’re responsible for the safety of the guests in your home. Also, if an incident in your unit impacts another, your personal insurance would cover the costs or repair. For example, a leaky faucet that created water damage in an adjoining unit. Typical amount of coverage ranges between $500,000 and $3,000,000.

The decision to move into a condo after owning a home is often made by those wanting to simplify their life. As a condo owner I can tell you there are many things I don’t worry about because my maintenance fee covers the day-to-day maintenance my building needs. But when it comes to the inside of your condo it’s best to assume that nothing is covered; if you want to protect any item get it insured for your own piece of mind.

RUBINA AHMED-HAQ is the Finance Editor for HOMES Publishing. You can read her columns in Condo Life and Active Adult. As well she’s the finance expert on The Steven and Chris show, regular contributor on CBC Radio, blogger at RateSupermarket.ca and has her own website AlwaysSaveMoney.ca.