Condo Insurance – Why does an Owner Need It?

When I, Leslie McDonnell of RE/MAX Select Properties in Vancouver, BC, am helping a person purchase a new condo or townhouse, I am often asked why is it necessary to purchase home insurance if the Strata Corporation already has property insurance?

Here are some great reasons why:·         
*To cover upgrades that have been made to the inside of your unit, such as flooring, countertops, appliances and cupboards;·         
*To cover the contents of your personal belongings, such as furniture, artwork, bicycles, jewellery, clothing and electronic equipment;·         
*To cover the cost of living expenses if you cannot live in your home while repairs are being made from damage;·         
*Personal liability insurance for visitors and guests, if they should injure themselves while in your unit;·         
*Insurance for damages to your neighbor’s property from you suite: for example, water damage arising from you washing machine, dishwasher, toilet, hot water tanks, etc.;·         
*Very important – to cover the Strata Insurance deductible – make sure this is in your policy. A water damage deductible for a Strata Insurance policy can range from $10,000 - $250,000.

Strata Corporation Insurance Policy

Typically, the strata corporation policy insures the building exterior and common property inside and outside your Unit. It also insures permanently affixed items inside your Unit such as kitchen cabinets, floor coverings, appliances, and other similar items that were permanently installed at the time the building was constructed.The Strata Corporation’s insurer does not take into account any improvements or betterments that have been made to the Unit by you or your predecessors. As an example, the Unit could have originally had carpeting and it now has Brazilian Cherry hardwood floors. In the event of a damage or loss of your hardwood flooring, the cost to repair or replace would be equal to that of the cost of replacing the carpet and not any increased costs for the flooring; those costs would be an owner’s responsibility and a claim would be filed under the owner’s Tenants Policy.

What other coverage do you need?

Most insurance agencies/brokers in your area can assist you with your insurance needs. They can also answer your insurance questions and provide the most suitable and cost effective policies for you. 

Strata Policy Deductible

Some insurance companies offer to pay for the deductible portion of the Strata Corporation Insurance Policy, if the payment of the deductible becomes the Unit owner’s responsibility. Do you know how much your Strata Corporation Insurance deductible is? When you buy your condo insurance, bring a copy of the current Strata Corporation Insurance policy along with you so you can ensure your coverage matches the deductible costs of the strata policy.

Something to consider

What would happen if a fire occurred and you lost all of your contents and belongings; no clothing, dishes, furniture, books, toiletries, kitchenware, electronic devices, bedding, - nothing left? It doesn't matter if it started in your Unit or in another Unit.

If you did not have your own Tenant’s Policy, you would have no coverage to replace anything. Go and see your local insurance agent today! Protect what you have worked so hard to obtain! 

Sample of a typical Condo Unit Owners Package Policy:

Limits             Description of Coverages                                                                Base Rates
$45,000           Personal Property including Replacement cost coverage                     $345 
Included          Earthquake                                                                                                            $30
$9,000             Additional Living Expenses                                                                    Included
$1,000,000    Personal Liability Insurance                                                                   Included
$5,000             Voluntary Medical Payments                                                                 Included
$1,000             Voluntary Property Damage                                                                   Included
$500                 Policy Deductible                                                                                       Included
$2,000             Food Freezer Coverage                                                                             Included
$500                 Deductible Sewer Back-up                                                                     Included
Total Annual Premium (average cost before discounts)                                           $375 

Discounts are often available and can be:·         
*Fire resistive building·         
*Mature citizen discount·         
*Local burglar alarm·         
*Monitored burglar alarm or fire alarm (monitoring company receives signal)·         
*Claims-free credit (allowed for 3 or more years where insurance has been carried but no claims made)·         
*Stability of residence (lived in the same residence for 6 or more years) 

Special Limits
All policies include “Special Limits”. These special limits restrict the amount that would be paid on certain valuable articles in the event of a loss. 

Examples of typical special limits are:·         
*$5,000 Jewellery and furs·         
*$5,000 Securities·         
*$1,000 Stamp collections and manuscripts·         
*$1,000 Coin collections·         
*$500 Money or bullion·         
*$2,000 Books, tools or instruments pertaining to a business, profession or occupation, but only while located on the insured premises·         
*$2,000 Boats, motors and accessories·         
*$1,000 Trailers·         
*$5,000 - $20,000 Property of a student·         
*$1,000 Bicycles

If any of the special limits are too low for your needs, items can be specifically scheduled. For example, a high value jewellery item may be scheduled at its appraised value for an additional premium. This would leave the special limit of $5,000 to cover other miscellaneous items of lesser value.

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