Understanding Condo Insurance

Stress-free living for the cost of a cup of coffee a day

Condos offer many conveniences but have unique insurance needs. You’ve likely chosen to live in one to enjoy being a homeowner without the need to take care of the building’s exterior or common areas. As the owner, you have title to your unit and share the benefits of greater security and other amenities such as a swimming pool, roof top patio or parking garage.

The condominium corporation will have a master insurance policy that covers the building’s outside structure and its common areas, but your unit is a different story. Condo insurance purchased by unit owners covers their personal belongings, any improvements and for protection for unexpected events such as if you damage another unit or if someone injures themselves inside your condo. The best part? Its affordable. For the cost of a cup of coffee a day, you’ll have piece of mind.

Since 2007, the experts at EasyInsure.ca have been helping condo owners like you find the best policies online from leading insurers across Canada. We present you with quotes online in minutes and, after choosing the best fit, you can purchase it online and manage it anytime with your EasyInsure MyAccount.

At EasyInsure.ca you can do it all. It’s as easy as 1-2-3!

What is condo insurance and why have it?

Since Canada’s first condo development in 1967, about 2 million households live in condos. They come in many forms: high-rise, low-rise and townhouse designs. In all cases, residents own the units. In others - called freehold condominiums - it includes ownership of the land.

Commercial condo insurance purchased by the condominium corporation covers the mains structure and common areas. Examples of such areas include shared hallways, foyers, pool, gym, elevators, roof, and windows.

Personal condo insurance purchased by unit owners protects your personal belongings, any improvements to your condo and covers unexpected events, such as if a water issue in your condo damages another or if someone injures themselves inside your condo. Some unit owners mistakenly think the commercial policy has them covered. That’s not the case and why you should always get your own coverage.

Do I need Condo insurance in Canada?

Similar to homeowner’s insurance, there is no law requiring owners to insure their condo. However, most condo associations and lenders require it as part of your contract or mortgage agreement. Typically, there will be minimum coverage requirements, and these will be outlined in your financing terms. Your lender will want proof of insurance before they release your funds. If you have no mortgage, why risk everything you own by not having your own insurance policy? That’s your peace of mind.

Doesn’t My Condo Corporation Insurance Cover Me?

No. This is probably the biggest misconception when it comes to condo insurance. Many condo owners think the maintenance fee they pay each month covers their personal insurance. But the policy carried by the condominium association only covers damage to the building and common areas, including the lobby, elevators, hallways, pool, gym, etc. This building insurance policy does not provide any coverage for individual condo unit owners or their belongings.

Do Condo Fees Include Insurance?

Generally, condo fees relate directly to the square footage of your unit, but the cost per square foot can range between buildings. It also depends on the building’s amenities, age, and other factors. This mandatory monthly fee is for utilities, building insurance, maintenance of common areas and the building’s reserve fund. You still need your own condo insurance to protect your unit and its contents, such as the fixtures and personal belongings.

What is covered by my Condo Insurance?

It’s important to understand what your personal condo policy covers versus the commercial coverage purchased by your condominium corporation. You should always review the condominium’s master insurance policy coverage alongside your own. Your personal policy typically covers:

• Contents - Your personal property such as clothing, appliances, and furniture. Most policies will protect your contents against water damage, as well as other types of loss. Policies usually permit you to choose a limit that starts at about $20,000 and goes as high as you may need.
• Upgrades to your unit and fixtures - These unit improvements can be made by you or previous owners up to a stated limit. This could include custom flooring, countertops, moulding and more.
• Your locker - Contents stored in the building are covered unless specifically excluded by your policy. Even though it’s not inside your unit, your locker is considered a part of your personally insurable property. Make sure your insurer knows you have a locker, so it is covered for theft.
• Third-party liability – This protects you financially for any bodily injury or property damage unintentionally caused to others. For example, if a downstairs condo unit’s ceiling has water damage because of an upstairs condo unit’s leaky faucet, the upstairs condo unit owner may be liable to pay for repairs.
• Special insurance assessments - Poorly managed condo finances can cause a shortfall when it’s time to replace such things, for example, as a roof. When the condo’s corporate insurance policy doesn’t cover all the costs, the corporation can pass an assessment to each unit owner. Even if you sell your unit, you have to disclose the special assessment. As a unit owner, it’s essential to protect yourself against insurance-related assessments by having the right policy.
• Loss assessment coverage - Since unit owners share responsibility for common property, loss assessment coverage pays your share (up to a stated limit) to cover major property and liability losses on common property that may exceed the condominium corporation’s policy limits.
• Theft - Since condos generally have greater security services and key fobs for residents to access elevators and common areas, theft is not as big of a risk. However, your personal policy will protect you from any thefts that occur in your unit or locker.
• Additional living expenses – In the event of an insured loss such as fire and water damage, your policy would cover expenses that you incur, over and above normal living costs. This would include food and hotel costs up to a certain amount. Coverage usually starts at around $10,000.

There are also optional coverages that can be added to your policy. For example, if you run a home-based business, if the condo is a rental property or secondary residence and if it contains specialty items such as high-end artwork or jewelry. Speak to your insurer for further information.

How Much Does Condo Insurance Cost?

Condo insurance is much more affordable than homeowners insurance. In many cases, you can get the coverage you need for about $400 to $600 per year depending on many factors like location, age of the building, your previous claims history, and other risks.

Experts say the average personal condo insurance policy in Canada costs somewhere between $27 and $33 per month. However, the amount you pay will be dictated by the limits of the insurance you select.

How Does Condo Insurance Work?

When you get a quote to insure your condo, the insurer estimates an annual cost or premium to accept the risk. Your premiums are based on how much money insurers think they will need to pay for the coming year’s claims. You pay the insurance company – either on a monthly or annual basis – a premium for assuming the risk on your behalf. Those premiums are put in a large pool. Your policy is an annual contract, so the pool operates for only one year at a time. The pool is then used to pay for the losses of those who make claims in that year.

Your premiums are affected by a number of factors including:

• Location – Does the area with a high crime rate or if the building is susceptible to weather events
• Age and construction of the building – What materials are used for electrical, plumbing and heating
• Unit size/features – Special features and upgrades
• Your belongings – The replacement costs for the things you own
• Claims history – The number of claims you have filed in the past
• Use – Is it rented or used as an Airbnb? You’ll require other coverage.

How Can I Save on Condo Insurance?

Everybody likes to save money, and condo insurance is no exception. But there are ways to reduce premiums, including:

• Shop around – It always pays to compare. Insurance companies have different rates and insure risk at different prices. Remember, EasyInsure.ca save you the time and find you competitive rates in just minutes!
• Bundle – If you combine your condo and auto insurance, you will end up enjoying a discount on both. In addition, if you own multiple properties and they are insured with the same provider that can mean savings too.
• Being claims-free – Stop and think whether filing a claim is worth it. It’s often better to cover the small stuff yourself so your rates aren’t impacted for years.
• Review your coverage annually – Sometimes your needs will change which may allow you to adjust the amount of coverage you need.
• Adjust your deductible – Assuming more of the risk and increasing your deductible will likely result in lower rates. Just be sure the increased deductible isn’t too much of a financial burden.
• Retired? – Tell your insurer. Some offer savings to individuals who are retired.
• Customer loyalty – Been with the same insurer for a long time? That will often qualify you for additional savings.
• Risk mitigation - Find out if your building has a maintenance strategy or reserve fund. If there are steps that have been taken to mitigate risk, let your insurer know.
• Mortgage free – If you’ve paid off your condo, you will likely qualify for insurance savings.
• Increase security – A monitored alarm will make your unit safer and likely qualify you for savings.
• Ask about discounts – Your insurer may offer discounts for being an alumnus or a member of a professional group.
• Pay annually – Insurers will often give a better rate if you pay for your policy annually, since it doesn’t involve as many administrative costs.

EasyInsure: Your fastest way to a stress-free lifestyle!

You’ve chosen to own a condo because you want an easier, maintenance-free lifestyle. But you also understand the need to protect your unit and belongings. Our EasyInsure online experts will find you the right condo policy at the right price in just minutes. You can buy and manage your policy online. It really is just as easy at that!