Is It Required to Have Condo Insurance?
To protect personal belongings and improvements made to a condo unit, many people rely on condo insurance. And although condo insurance is not mandatory, there are many reasons why having condo insurance is a good investment. This post will go over the types of condo insurance available, some of the factors that affect insurance premiums and some things to consider when deciding on a policy.
What About the Condo Building Insurance?
Many condo owners wonder why they need condo insurance when their building already has its own policy. Condo building insurance, otherwise known as a condo corporation insurance policy, covers the main structure plus all parts of the building that are considered common areas which would include the building’s entrance, elevators, hallways, lobby, recreational rooms, parkades and the like.
Damage to Common Areas or Other Units
If any damage occurs to common areas or other condo units, but the problem arises within your own unit, you could be held liable for your negligence that caused the damage. For example, in winter months if your left a window open and the pipes freezes and the water leaks into the units below yours or into the hallway and causes damage, you are responsible for the costs of repair and/or replacement. Having your own condo insurance would cover the costs of repairing these types of damages.
Types of Condo Coverages
There are different types of condo coverages that provide different levels of protection. Which type is most suitable for you will depend on your specific needs. “All Risks” insurance covers the contents of your condo against all types of damages unless otherwise specified. Personal Liability protects you in case due to your negligence you cause damage to the property of others or cause injury or death.
Contents insurance covers the replacement value of your possessions if they’re stolen or destroyed, even if this occurs while your possessions are outside of your unit e.g. while travelling. Replacement Cost Insurance will replace damaged or lost items at their original value without depreciation. Additional Living Expenses will cover any costs related to living expenses that might arise if you are forced to vacate the premises due to insured loss while the repairs are being carried out.
Factors Affecting Insurance Rates
Some of the factors that are taken into account when assessing your insurance rates are things such as how old your building is, whether you have made insurance claims in the past, and the value of your possessions.
If you have special collections of valuable items such as art, musical instruments, coins, stamps you might need extra coverage to make sure they are insured properly. Also renting out your unit on a short-term basis using services such as Airbnb may require extra insurance coverage. Even if you do not own the condo and are a renter instead, you should consider tenant insurance to protect your belongings.
About the Author
Kristopher Parks graduated with a Bachelor’s in finance at the University of Calgary. He has over 10 years of experience in the insurance industry as an agent/broker. He enjoys spending his free time with his family by going to hockey games and camping. If you’d like to contact him, you can do so at his LinkedIn.