The Importance of Ensuring You’re Insured
There are two types of insurance you have on your strata condo or townhome (a unit in a building that you share with other owners): Strata Insurance and Personal (Condo) Insurance. The Strata Insurance is something that every owner in the building contributes too (through monthly strata fees) since it covers everything the the owners have a mutual ownership in, including lobbies, hallways, roofs, etc.
If you’re currently a renter, you should be insured as well. The issues mentioned below are similar for renters, and there’s a good chance that it’s stated in your lease that Tenant Insurance is required.
Strata Insurance Should Cover:
- The buildings shown on the strata plan.
- Common property such as hallways, stairs, roof, pools, amenities, garages, driveways, etc.
- Fixtures built or installed as part of the original construction such as floor and wall coverings, electrical and plumbing fixtures.
- Strata assets such as furniture in the lobby, equipment, etc.
- Liability of the strata corporation for claims of property damage and bodily injury suffered by others
Personal (Condo) Insurance Should Cover:
- Your personal property such as clothing, household items and furniture as well as items stored in your locker
- Upgrades to your unit (for example, hardwood flooring, upgraded kitchen, etc.) made by you and previous owners of your unit.
- Additional living expenses, over and above the normal cost of living, in the event of an insured loss.
- Your personal liability for any bodily injury or property damage unintentionally caused to others.
- Some damage to the building that you are held liable for, i.e. fires, floods, etc, which includes the deductibles.
Condominium insurance is more than just a policy guarding your personal contents and liability; it represents peace of mind and is absolutely necessary for any owner, renter, or landlord. It’s a small price to pay to ensure you’re covered for accidental issues.
As a homeowner, you should inquire with an insurance agent regarding the value of your property, and the gaps in the Strata Insurance that you need to cover with your own personal insurance. Strata Insurance varies by building, and is typically renewed every year, so you should be renewing and refining your insurance policy every year. In order to find out what your Strata Insurance is, you need to ask your Property Managers, or attend the yearly AGM meeting for more information.
If, for example, you cause damage to the Strata building, or other owner’s units. You are liable to pay for their fix or replacement. If what was damaged is covered by the Strata’s Insurance, you are still liable to pay for the “Deductible“. This is an amount of money that you need to pay upfront before the insurance kicks in. Say you caused a flood in the building, within damages surpassing $100,000 (this isn’t a high number if the flood leaks down a number of floors). You will be required to pay the “Flood Deductible” which could be in excess of $25,000. Thankfully, your personal insurance can cover this amount.
Be aware of the deductibles for losses in your building and what you may be required to pay. Speak with your insurance representative to ensure you have appropriate coverage.
Other Types of Insurance Coverage to Consider:
Here are some other coverages available to strata unit owners:
• Increased unit improvements and betterments coverage provides additional coverage for upgrades to your unit above the standard limits of your condominium unit owner’s policy.
• Unit additional protection coverage insures your original strata unit itself (for example, walls, ceiling, floors) so that you are protected in the event your strata corporation’s insurance is insufficient. Speak with your insurance agent for further details.
• Strata insurance deductible assessment coverage is unique to personal (condo) insurance. For example, if the building is damaged due to an accidental break of a water pipe, the strata corporation would file a water damage claim with its own insurance company. Each unit owner may be assigned a portion of the deductible to be paid. In other situations, the unit owner may be responsible for the entire deductible – if it’s your fault or if the loss originated from the your unit (and could have been prevented). Speak with your insurance agent to ensure you’re protected with deductible insurance.
• Loss assessment coverage is also available. Since strata unit owners share responsibility for common property, this coverage typically pays your share (up to a stated limit) to cover major property and liability losses on common property that may exceed the strata corporation’s policy limits. Speak with your insurance representative to find out if this type of coverage is right for you.
Though many would find insurance matters boring, it is absolutely necessary to ensure that you’re properly covered for all possible events. Take the time to chat with an insurance agent about the meaning of different types of insurance and when they might come into play.
Have your insurance start the Completion Day, typically the day BEFORE you take possession to insure you’re covered for the time you are an official owner of the suite.
Let us know if you have any questions, or talk to an insurance agent (google Insurance in East Van). You’re free to get insurance quotes from different lenders to compare rates and terms.