I am often asked by condo owners if they need household insurance. The answer is “YES” and I also emphasize that every condo owner must have building deductible insurance.
Why does a condo owner need household insurance when there is already a strata building insurance policy?
Strata corporations take out an annual commercial insurance policy that covers the following:
- The building structure as stipulated in the legal strata plan.
- All common property.
- All fixtures installed during the original construction; for example floors, wall covering, plumbing and electrical fixtures.
- Liability for claims of property damage or bodily injury suffered by others.
The condo homeowner’s insurance policy covers the following:
- Personal contents such as clothing, furniture and household items.
- Any upgrades to the condo. This is an important area to address when purchasing your insurance policy. You must itemize all renovations and upgrades within your condo. Most insurance companies will only insure the condo to its original condition as to when it was built. For example, if the condo was built 15 years ago and originally had carpets then the insurer in most cases will only replace the flooring back to carpet. If the insurance policy did not itemize the upgrade to hardwood flooring, then the insurance company will not insure the extra expense to have the hardwood floors replaced. The homeowners will be on the hook for the additional cost.
- Living expenses when you must vacate your condo for a period of time while the damages are being repaired. I have heard of some homeowners having to find alternative housing for up to 3 months. This can be very expensive when having to rent short term and furnished.
- Personal liability for property damage or injury caused by others.
Why do I need building deductible insurance?
This is one area that I am adamant about that all condo owners are aware of when purchasing a homeowner’s insurance policy. If a condo owner is responsible for a water leak or a fire or any other act that causes damage to the building, the strata corporation will file a claim with its own insurance policy. The strata insurance policy will have a deductible that in most cases is a minimum of $10,000. The strata corporation in turn will hold the condo owner responsible for the damages to pay the deductible. If the condo owner cannot pay the deductible the strata corporation will sue and place a lien on the condo.
It is important to read the strata documentation to find out the amount of the strata insurance policy deductible. If a building has had previous claims the deductible maybe as high as $50,000 to $100,000.
When purchasing a condo in Vancouver it is very important to thoroughly read the strata documents and provide a copy of the strata corporation’s insurance policy to your insurance broker. Have your broker tailor fit the buildings insurance policy, any upgrades to the condo and a current dollar amount for replacement value for all of your contents.
For further information on insuring your condo click on IBABC strata building and unit insurance.