Are you oblivious to why you need condo insurance or what it covers? Have you ever wondered if your condo association is responsible for your condo insurance? If you don’t own a condo but are a tenant, have you ever given a second though to renter’s insurance? Not everyone is aware of condo insurance, which is why we wish to help you comprehend your condo insurance policy, so that whenever you want to invest in a Toronto Condo, you know what risks you are covered to.
However, before we delve any deeper in this subject, you need to know a few basics. First off, whether you are a tenant or the owner, you do need condo insurance for your individual condo unit. In addition, another policy, known as the condominium corporation’s insurance, comes into play, which safeguards the common use areas and the building itself, but isn’t responsible for your individual unit. Here’s what’s covered by the condo insurance for homeowners.
Condo Insurance for Homeowners:
· Your Contents: Condo insurance covers any damages to your content up to a pre-defined value, in the event of a theft, break in, damage from a burst pipe, or flooding thanks to your above-floor neighbor leaving the tap on when going away.
· Condo Upgrades: In addition to covering your contents, condo insurance also takes care of any condo upgrades, such as kitchen moldings, counters, upgraded cabinets, or revamping the hardwood floors.
· Liability: In addition to protecting your own contents, shouldn’t your finances be protected lest you are sued for negligence (who knows you are the neighbor who left the taps open when heading out for vacation, flooding your neighbor’s unit, or you have a kitchen ‘accident’ that causes damages to other units in proximity). The third-party liability clause of condo insurance protects against this risk.
· Locker: Most people never find out about this lesser-known part of the condo insurance, but it does exist. The contents of your storage locker are also protected by the condo insurance.
· Living expenses: If your condo becomes uninhabitable due to any catastrophe, such as fire, floor or any other disaster, leading you to stay in a hotel during the maintenance period (which could be several months), your condo insurance will pay up a reasonable price for your accommodation. Don’t ask for a honey-moon suite in a 5-star hotel, but rest assured, you won’t be disappointed by your living conditions.
· Condo Assessments: If your condo corporation lacks the funds to cover the costs of an accident or a catastrophe, such as damages to roofs after a storm, some of the repair costs may be passed off on the unit owners. These ‘special assessments’, though very rare, may cost an arm and a leg. But with a condo insurance policy, you are covered.
· Fair rental value: If an accident or damage is stopping you from renting out your condo at its market price, you are losing out on your due rental income. This risk is covered by the condo insurance policy as well. A rental value will be determined based on what your insurer thinks to be an appropriate amount, against other similar units in the area, as opposed to what you consider fair.
Condo Insurance for Tenants:
Call it renters or tenant insurance, it’s not just a bonus that you can consider. Most landlords actually ask you to have this policy. Condo insurance for renters covers these bases:
· Your contents: Even if you get a fully furnished condo, you still bring in plenty of your own stuff, from your wardrobe, shoes, laptop, jewelry to electronics and your personal items. In the events of a disaster, your contents are covered by a tenant insurance policy up to a particular value. However, if you have particularly pricey items at your unit, such as your private wine or art collection or jewelry, it’s better to get a separate insurance endorsement for them.
· Liability: You don’t just get sued If you are the owner. Even if you are a tenant, someone can sue you in case you cause inadvertent damage to surrounding units, such as flood the units beneath you! God forbid you let candles burning through the night, or forget to put out your cigarette and cause a fire that spreads through other units? This is where you will find the condo liability coverage clause helpful.
· Living Expenses: If a disaster or an accident has rendered your unit uninhabitable, such as flood, fire, or other damages included in the policy, your condo insurance covers your living expenses in a reasonable hotel for the entire duration of the repairs, provided it doesn’t extend the set limit.
Condo Insurance Pertaining to High-Value Items
Keep in mind that condo contents can only cover your contents up to a set value. In addition, it might not cover exorbitantly expensive items such as jewelry and arts. If you have any such items at your home, make sure that your insurance provider knows about them. Not to mention, have these items appraised individually and make sure you have separate coverage for all of them
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