What a unit owner must have coverage for ?
Glutton for punishment then, are we? You made it through the first of our two-part article series on condo insurance and you figured you’d come back for more? Well, you’re in luck, because today, we’re going to be taking another step forward into the wide, exciting world of Alberta condo owner insurance to discuss the ins and outs of individual condo unit insurance, guided once again by the sagacious advice of Catalyst Condo Management Ltd’s own insurance and claims ace, Kassidy Poudrier.
Five Points to Know About Individual Condo Unit Insurance
1. Do I Really Need Condo Unit Insurance?
Yes – emphatically, yes! You absolutely, really, truly, 100% need condo unit insurance. Not having condo insurance in place sets you up for trouble in more ways than one. First, it’s important to keep in mind that even if your condo corporation has insurance, that policy will only actually cover the physical structure of the unit itself – floors, ceilings, walls, that sort of thing. This means that if a pipe happens to burst in your unit (or, say, the unit above yours), and your whole condo is flooded out, the condo corporation’s insurance will make sure your walls and floors are good again – but that’s about it.
Additionally, changes made to section 62.4 of the Alberta Condominium Property Act back in January of 2020 come into play here. As Kassidy reminds us, “If a loss originates within your unit, the condo board now has the means to collect the corporation’s deductible back from you, up to a total of $50,000. So, if you have a leak from your dishwasher, for example, and it caused damage to two units below, you would not only be responsible for covering the deductible for the damage associated with your unit but for deductible costs related to the two other units as well, up to a total of $50,000.” Your own individual condo insurance can cover these costs, but without a policy, you’ll be on the hook to handle them yourself – which is a bit of a nerve-wracking proposition, considering the condo corporation doesn’t need to prove fault or negligence in the cause of the damage, just that it came from your unit.
2. Okay – You’ve Convinced Me. So, What Sorts of Coverage Are There?
Glad we could bring you around! So, in terms of types of condo owner insurance, there are a few different varieties to consider. First, as we’d mentioned, there’s the sort of insurance that protects the contents of your condo from things like fire, water, smoke, etc.
“You can also get insurance on special assessments,” Kassidy pointed out, “so that if the property is lacking money in their reserve fund to cover a large or unexpected project, you’re covered. This can bring a lot of peace-of-mind for condo owners – it can be a pretty unwelcome surprise to suddenly be asked to pay an extra $2000 randomly even though you already pay your condo fees every month.”
At this point, we’d also like to take a moment to mention just how valuable it can be to work with an insurer that’s familiar with the details and dealings of condo-related coverage specifically. For example, we’d mentioned in the previous point that change to section 62.4 of the Alberta Condo Act – a knowledgeable insurer will take a look at your condo community’s bylaws, gain an understanding of the particular deductibles your condo corporation’s policies entail, and build your plan specifically to give you the coverage you need should you find yourself needing to cover a deductible, ensuring you’re not under-or over-insured in the process.
3. Get to Better Know Betterments and Improvements Coverage
The other detail you’ll want to consider when sorting out insurance for your condo is betterments and improvements coverage. “Unit owners will want to look at the insurance certificate for the condo and determine whether or not that condo is insured for betterments and improvements,” Kassidy explained, “This coverage would ensure that any upgrades made to the unit are covered in the event of a loss or damage. So, if they bought their unit with linoleum, and they put beautiful hardwood in, betterments and improvements coverage ensures that the flooring would be covered for the amount of the improved hardwood flooring, as opposed to the original, cheaper linoleum.”
Whether the condo corporation’s policy includes betterments and improvements coverage or you’ve got to add it to your own plan, this is definitely something to look into if you’re the sort of condo owner who likes to spruce things up.
4. How Do I Respond to an Insurable Incident?
How you respond to an insurable incident really depends on what sort of condo you happen to call home.
“In a townhome-style condo unit, if you’re fairly certain you haven’t affected any other unit, you can simply call a plumber or a restoration company or whoever is necessary and handle things on your own in that unit,” Kassidy told us. “In an apartment-style condo, though, you have to assume that, say, with water damage, that it’s found its way down to the unit below – and the best thing to do in that situation is just to call your condo management company and let them know about it, and they’ll guide you from there.”
5. Any Advice to Keep From Having to Make a Claim in the First Place?
While there’s no real advice we can give that will guarantee you won’t ever need to make a claim, the best way to mitigate these sorts of damage-causing scenarios is through maintenance.
“Check the plumbing in your unit regularly. Check supply lines, hoses, take a peek under the sink and around the dishwasher, that sort of thing,” Kassidy advised. “The worst sorts of problems often just come from a slow drip – you don’t really notice the issue until there’s a lot of damage that starts to show up all at once, and it takes a lot more time and money to fix things than if you’d caught it in the first place. Be diligent, and you should be able to catch most things before they become a problem.”
Are you looking to make heads or tails out of individual unit condo insurance? Keen to learn more about the types of coverage and process in general? Contact us at Catalyst Condo Management Ltd today to chat about condo unit insurance, condo corporation coverage, and more.
Hyperlink to previously-posted condo corporation insurance blog