What a condo board must have coverage for ?
One of the big, fundamental advantages of being an Alberta condo owner is getting to embrace all the benefits of homeownership without having to commit yourself to many of the mundane, downright boring responsibilities that come along with it. Does the grass need cutting? There’s a guy coming on Tuesday for that. Does the sidewalk need shoveling? Let’s hit the slopes instead – someone else will handle it. Pretty sweet deal, right?
However, there is one area that as a condo owner, it’s important to take a moment to focus on and act the part of the responsible, homeowning individual, and that’s condo insurance.
We know, we know. Condo insurance really doesn’t tend to lend itself to subject matter that’s particularly captivating or compelling. That said, though, it’s definitely a topic that, as condo owners, it’s important to have a firm understanding of – lest you find yourself stuck with an incredibly large bill wondering how exactly they fit that many zeroes on a single piece of paper. That’s why we’re taking a deep dive into the subject, tapping the experience of Kassidy Poudrier – Catalyst Condo Management’s insurance and claims aficionado – to weigh in on today’s article focused on condo corporation insurance.
Five Details to Know About Your Condo Corporation’s Insurance
1. What Exactly Is Condo Corporation Insurance?
As Kassidy took the time to explain, condo corporation insurance (not to be confused with owner-specific insurance coverage particular to an individual condo unit, a topic we’ll be covering in our next blog) typically pertains to the larger, more structural elements of the building.
In addition to safeguarding these overall critical structural elements, condo corporation insurance also typically includes directors and officers coverage as well.
2. What Parts of the Building Does Condo Corporation Insurance Cover?
In addition to ensuring the building envelope and critical mechanical workings, condo corporations will typically take out insurance policies protecting the units as well, “as they are of course part of the structure of the building,” Kassidy explained, “and of course in case there’s a multi-unit loss – but only with regards to the interior finishing. So, walls, ceilings floors, cabinets, counters, anything that’s affixed. That said, it’s important to clarify that this insurance does not cover any personal effects within the unit. Even appliances are usually excluded from the condo corporation’s overarching policy.”
Under this coverage, then, a condo building is typically protected against water loss; sewage backups; loss related to fire, smoke, or anything like that; earthquake insurance (yes, even here in Alberta!); hail damage; and flood damage.
3. Does It Do Anything Else?
We’d mentioned directors and officers insurance earlier, and that’s the other facet of condo corporation insurance. “This is basically the coverage that you maintain for the people who work for the corporation,” Kassidy explained. This is meant to protect the individual volunteers on the condo board against any liability they may encounter while serving as a result of human error or similar circumstances. “People are only human. They make mistakes. Money can be completely innocently mishandled. This insurance covers that.”
The corporation is also typically covered against instances of board member dishonesty and crime as well – if, for example, anyone made a habit of actively stealing money from the corporation. Finally, there are also generally condo board insurance provisions that cover any legal costs the corporation might accrue in the instance that it is taken to court for any reason.
4. What Can Condo Corporations Do to Be Proactive?
“It really comes down to maintenance,” Kassidy affirmed when speaking to any proactive steps that can be taken by condo corporations to avoid needing to place an insurance claim in the first place. “Many condo corporations – especially bigger ones governing larger properties – will contract out regular maintenance walkthroughs and inspections quarterly, bimonthly, or even monthly to check out absolutely everything in order to mitigate loss or damage.”
When it comes to individual units, though, Kassidy explains that there’s much to do but rely on the owners to be responsible with their property and keep up on maintenance in order to avoid property damage or even loss. “Nobody wants us in their units checking all their stuff out!” she laughed – and yeah, fair enough!
5. Anything Condo Corporations Should Consider When Getting Insurance?
The Alberta Condominium Property Act legally requires specific perils, conditions, and losses to be covered by a condo corporation’s insurance, and so boards would do well to refer to the Act when looking to take out a policy.
Additionally, we’d advise corporations against trying to keep costs down by underinsuring the building – this is a false economy in our experience and is rolling the dice not just with your condo community’s finances, but with their homes as well.
Finally, when shopping around for a policy, Kassidy recommended that condo corporations look to work with an insurer that’s familiar with condo-specific policies. These providers will know just what policies are needed according to the provincial Act and will be able to walk you through any little idiosyncrasies particular to condo insurance with ease and expertise.
Is your condo board in the process of exploring new insurance policies? Looking to learn a bit more about condo corporation insurance or the process in general? Discover a knowledgeable team to help advocate for the interests of your condo community – contact us directly at Catalyst Condo Management today.