Properly insuring your condo: What you need to know

Double protection for condo owners

New condo owners are often surprised to learn that protecting a condominium requires two separate policies. There is the condo owner’s home insurance policy and the condo corporation’s insurance.

When an incident occurs, compensation is provided by one insurance contract or the other—or both—depending on the extent and nature of the damage. Understanding the specifics of each type of coverage is essential to avoid unpleasant surprises.

Condo owner’s insurance

As a condo owner, you need to get home insurance tailored to your needs and your unit. This insurance offers various protections, some of which are required by law or by the condo declaration.

For example, you would be covered if:

• Your dog bites someone and causes serious injury.
• Your washing machine breaks and water leaks into the unit below.
• A fire that started in your unit damages neighbouring units.

Good to know: If you are held liable for damages, the condo corporation may claim the cost of repairs from you.

Personal property and improvements

This insurance covers your personal belongings, including appliances, furniture, clothing, and electronics. It also covers improvements made to the condo that go beyond the standard description of your unit.

For example, if you replace your kitchen cabinets with higher-quality ones, your home insurance will cover the price difference.

Good to know: The equivalent cost of the lower-quality cabinets will be covered by the condo corporation’s insurance.

If you carry out improvement work in exclusive-use common areas, your home insurance will cover those improvements. For instance, if you install ceramic tiles on a terrace floor, you will be covered.

Additional coverage – Loss assessment

Loss assessment coverage protects you against any amount the condo corporation may charge you if it needs to repair damage to the building and the reserve fund or insurance proceeds are insufficient.

Please note: Your policy must include the necessary protections to benefit from this coverage—for example, for damage caused by sewer backup.

Additional protections

Additional protections or minimum coverage amounts are sometimes required by the condo declaration. This is particularly the case for water damage and sewer backup.

Condo corporation’s insurance

The building that houses each condo unit requires commercial insurance held by the condo corporation.

Condo corporation’s liability coverage

This insurance covers the liability of the corporation and the individuals responsible for the proper operation of the building. It also includes common areas such as the entrance, elevator, and terrace. It protects shared property, such as terrace furniture, and covers the fixtures listed in the register of private portions of each condo unit, such as a bathtub or cabinets.

Good to know: The Civil Code of Québec requires the condo corporation to maintain a register describing the private portions of the building. This allows you to know what improvements have been made to your unit and to properly adjust your home insurance coverage.

Self-insurance fund

Condo corporations are required to establish a self-insurance fund. This fund, administered by the board of directors, covers the insurance deductible in the event of a claim. It is also the corporation’s responsibility to have damage repaired following a loss affecting condo units or common areas.

Good to know: These repairs do not include owners’ personal belongings or improvements made to the units.

Insurance against standard risks

Insurance against standard risks (theft, fire, etc.) is mandatory and must correspond to the replacement value of the building. In the event of a loss, the corporation may collect an amount from all co-owners to cover the damage it is responsible for insuring.

Comparison chart – Which insurance covers damage in a condo?

Assessing your condo home insurance needs

Before choosing a home insurance policy, make sure to read your condo declaration carefully. This will help you understand your insurance obligations for your private unit.

Also obtain a copy of the condo corporation’s insurance policy and review it thoroughly. What is the building’s insured value? Is the coverage sufficient? What is the deductible amount, and who is responsible for paying it in the event of a claim?

If certain protections appear insufficient, adjust your home insurance policy accordingly. Some endorsements are designed specifically to fill the gap when the corporation’s insurance falls short.

Choosing coverage adapted to your needs is the best way to avoid unpleasant surprises. An informed buyer is a prepared buyer. Talk to your insurance broker today!