Condo Insurance for Tenants and Home Owners. What do they cover?
There are multiple aspects of condo insurance, and that can make it a bit confusing when it comes to determining which type of insurance you need to get. Are you a condominium corporation? A condo owner? A tenant? There are different policies designed to provide different types of coverage based on your role within the condominium—but based on this information, how do you determine what your needs are, what you are responsible for, and what you are not responsible for?
This handy guide is designed to help clear up a bit of that confusion so you can better understand your condo insurance policy—along with the risks it covers when you buy a condo.
But before we get too far ahead of ourselves, there is one thing you need to know: no matter whether you own or rent your condo, you need insurance. The condominium corporation is also required to have insurance, but their policy only covers the building envelope and common use areas. You need a separate policy to protect yourself, your unit, your contents, and your finances.
Let’s Start with Tenants’ Coverage
Tenant insurance is designed for those who rent instead of own. It provides coverage for contents and personal property (without the, in this case, unnecessary structural coverage), along with personal liability coverage (which protects you from damages you may cause to property that isn’t owned by you or from injuries to other persons).
It may seem unnecessary—what’s the worst that could happen? But consider all of your possessions. Can you afford to replace all of these items on your own, should the worst happen? Tenant insurance is an inexpensive way to protect your personal property and your finances. Even if you are just renting a room in a house, you are eligible for tenant insurance at affordable rates.
What risks will condo insurance for tenants cover?
- Your contents: Condo insurance for tenants will cover your personal belongings (your laptop and other electronics, your clothes, shoes, and personal items) up to a particular value—just remember to get a separate insurance endorsement for any expensive jewelry or wine collections you may own.
- Liability: If you cause damage or bodily harm to another unit or person (i.e.: by causing flooding or a fire), your condo insurance for tenants will provide you with protection via liability coverage.
- Living expenses: Your condo insurance for tenants comes with a built-in backup plan in the event that your unit becomes uninhabitable due to damages. Your insurer will pay a reasonable amount to cover the cost of finding alternative accommodation for the duration of the repairs or for a specified number of months.
Home Owners Risk Coverage
What risks will condo insurance for condo owners cover?
- Your contents: Just as with tenant insurance, your condo insurance will cover your personal items, from your laptop and TV to your clothes, up to a pre-defined value, should they be damaged by fire, flooding, or even as a result of a break-in.
- Condo upgrades: Did you just spend a fortune upgrading to hardwood floors or installing new cabinets? Don’t worry; your condo insurance covers your condo upgrades, too.
- Liability: Condo insurance doesn’t just protect your personal property; it also protects your personal finances by providing you with third party liability coverage in the event that you cause damage to other persons or property in the building (i.e.: by flooding your downstairs neighbour’s apartment or causing an oven fire that damages multiple units).
- Locker: Your condo insurance even covers the contents in your storage locker!
- Living expenses: If you end up having to relocate for a period of time as the result of damages to your unit (such as a fire, flood, or other disaster), your condo insurance will provide you with a reasonable amount to cover alternative accommodation.
- Condo assessments: Your condo corporation has the option to pass some of the expense along to you in the form of special assessments should the building envelope become damaged (a typical example of such damage is holes in the roof resulting from a severe storm). Your condo insurance policy will cover these costs, too.
- Fair rental value: If you own a condo and rent it out, damages to the building that make the unit uninhabitable translate into loss of rental income for you. Your condo insurance policy will provide protection from this loss, too; however, your insurer will pay a rental value that is determined based on comparable units in the area.
See other articles about Homeowners Insurance
Additional Risks Coverage:
Your standard homeowner, tenant, or condominium insurance policy provides you with a lot of coverage; however, there are a few things you need to be aware of when it comes to valuable possessions (like jewelry, special collections, etc.).
For instance, your insurer may only provide coverage for valuable items at a fraction of their current value. You can, however, increase the insurance protection on your valuable possessions in a couple different ways:
1) Increase the limit on your policy for your personal items; or
2) add a separate floater or endorsement to your policy to obtain broader protection. This method will allow you to itemize each piece, whether that piece involves a single antique or a collection of art or fine wines. Adding a separate endorsement may end up increasing your premium, but it is the best way to provide more adequate coverage for your valuable items, and to provide coverage in situations that aren’t typically covered in homeowner policies (i.e.: accidental damage, coverage for breakage or damage to fragile items, and mysterious disappearance).
We hope these tips provided by CondoEssentials have helped you understand your condo insurance and your condo risks a little better.
Contact us for more information about the best condo insurance policies available on the Canadian market, or for any other coverage you may require for your other insurable needs.