What does condo insurance cover? It’s one of the biggest questions to consider when taking out a policy. This type of insurance is crucial if you live in a condominium, but you need to know what is covered and if you’ll need to get any optional extras.
Thankfully, we have all the information you need right here. We’ll look at not only what is covered with condo insurance but also what is excluded and provide some tips for getting the perfect policy. Let’s take a look.
What Does Condo Insurance Cover?
Condo insurance will consist of several key components, so let’s take a look at what they are in greater detail.
1. Personal Property Coverage
Also known as contents coverage, this will protect any of your belongings within your condo. This will include your furniture, your technology, clothing, and any other personal effects. There will be a policy limit, so high-value items such as jewelry may not be completely covered.
These items will be protected from most circumstances, such as theft, fire, water damage or other perils. In the event of damage, the insurance policy will help to repair or replace the item. You should create an inventory of your belongings to ensure your policy is adequate.
2. Unit Improvements
After buying a condo, you’ll own everything between the walls of your unit. This includes any upgrades that you’ve made to the space. Your insurance will likely cover these changes, also known as betterments.
For example, you may have upgraded the flooring after moving on and now it has suffered water damage. Here, you’re going to be covered. This applies to all enhancements such as installing custom cabinets or remodeling your bathroom.
3. Personal Liability Coverage
Another critical component of condo insurance is personal liability. You are liable for any injuries that happen within your condo.
The costs of a personal liability claim can be huge and this will protect you from being sued. This will not only help to cover your legal expenses but also your medical bills, and any settlements or judgements that are made.
4. Loss Assessment Coverage
Your condominium master policy will protect you from most things that happen outside of your condo. However, there is a catch. If a significant loss exceeds the coverage, individual unit owners are often expected to split the additional cost.
An example of this would be significant damage to the roof that required major repairs. The corporation’s policy limit may not be sufficient. Here, loss assessment coverage can help you pay your portion of the bill.
5. Additional Living Expenses Coverage
If there has been damage to your condo that has rendered it uninhabitable, this will cover you for temporary living arrangements while repairs are made. This not only includes accommodation such as a hotel, but also some other living costs.
What Condo Insurance Typically Does Not Cover
Condo insurance doesn’t cover everything, and that can be a good thing. Let’s take a closer look at what will be excluded from your policy.
The Building – Damage to the building on any part of the condominium will be covered by the corporation’s master policy. This is one of the key reasons why condo insurance is much cheaper than home insurance.
Common Areas – That building coverage also extends to common property areas. This includes shared spaces such as the lobby, parking, gym, or any type of communal area.
Outside Liability – If one of your guests trips on a broken step in the stairwell, for example, that will fall under the corporation’s liability and not yours. You are only liable for accidents that happen inside your condo.
Flood and Earthquake – Standard policies won’t provide coverage for these major events, however when living in a condo in Toronto, the risks are very low.
Wear and Tear – Damage resulting from normal wear and tear aren’t covered. For example, if you want to replace your flooring as the old surface is looking worn, that won’t be covered.
High-Value Items – Your policy will have a limit and you may need extra coverage for the likes of jewelry, art, or collectables.
Business – You won’t be covered for any business-related activities. You’ll need a separate policy for this.
Understanding Your Condo Corporation’s Master Policy
As we’ve mentioned, the corporation that owns the condo will have a master policy that will cover the building structure and common areas. It’s good to know exactly what this policy covers and what you are liable for.
For example, some pay covers the basic features of your unit as when it was originally built, such as fixtures and fittings. You’ll also want to look at their policy limits as this can dictate if or how much loss assessment coverage you need.
Tips for Choosing the Right Condo Insurance Policy
Now we know what you’re covered for, let’s look at some quick tips on finding the right policy.
Assess Your Needs – Evaluate your personal property and determine the coverage you need for any improvements or high-value items.
Check Exclusions – Look at what is excluded from both your and the master policy, then decide if you need additional coverage.
Repairs and Replacement – Look at whether your policy covers the full replacement of an item to new condition or just takes depreciation into account.
Compare Quotes – Shop around to find the best deal, or contact a broker to do the hard work for you.
Check Deductibles – Understand how deductibles work and choose an amount you can comfortably pay in the case of a claim.
Related Article:https://bucklerins.com/how-much-is-condo-insurance-in-toronto/
Final Thoughts
Thankfully for condo owners, the master policy of the condominium is responsible for any major repairs that need to be carried out. However, you still need to ensure your policy works for you to avoid facing unexpected costs.
Condo insurance is essential for protecting your personal property and liability but it still needs to be tailored to your needs. If you need condo insurance, get in touch with Buckler Insurance today, and we’ll be happy to guide you through the process.
