Absence of insurance

A loss causes damage to a condo unit and to the condo building. However, the syndicate does not have insurance or coverage under its policy to cover the loss. How does this work? Here are explanations.

For the syndicate

If the loss is not covered due to the absence of insurance or coverage, the insurer is nevertheless responsible for having the damage repaired, since it must ensure the conservation of the building. It can:

• Withdraw the money from its self-insurance fund;
• Apportion the amount of the damage among all the co-owners.

And if a person is responsible?

• The syndicate can claim the amount of the damage from the person responsible. This could be a co-owner or a third party.

For the co-owner

If improvements to the co-owner’s unit were damaged, the co-owner’s insurer will cover the claim for that portion.

The co-owner may be required to pay his share of damage claimed by the syndicate, regardless whether or not the co-owner’s unit was damaged.

• The co-owner’s insurance must, however, include coverage for the loss that caused the damage in order to be compensated for the amount of apportionment claimed by the syndicate.
• The policies generally pay 90% of the apportionment amount limit, up to the insurance amount under the Extension of Coverage – Loss Assessment.
• The co-owner must pay his deductible.

Note: It is very important for co-owners to have coverage for all perils to which they could be exposed through apportionment. For example, even if they live on an upper floor, they could still be responsible for a apportionment for sewer backup!

What if a co-owner is responsible?

The responsible co-owner has civil liability coverage. His insurer will defend him and if he is held responsible, it will indemnify the parties that suffered the damage as per the provisions of his condo insurance.