Condo insurance: 4 things to keep in mind
To be well covered as a co-owner, here are 4 concepts to take into account when buying or renewing your co-owner insurance contract.
1. Improvements: syndicate's obligation to help you
Under the legislation, co-ownership syndicates must now make a description of the private portion. This description corresponds to a “standard” condo unit. This will help you more easily determine the difference between the standard unit and the improvements that have been made to your condo unit by you or previous co-owners over the years. You will know what is covered by the syndicate's insurance and what needs to be covered by your condo insurance.
Note that, as co-owner, you need to insure the improvements made to your unit, while your syndicate must insure what is mentioned in the reference description for your unit and the condo building.
2. Apportionment: all for one
After a loss, your syndicate may claim an amount of money from the co-owners to repair damage caused to the portions it is responsible for insuring. These are common expenses in the event of a loss. Under the legislation, it is obligated to apportion this amount among all the co-owners according to their share, whether or not they suffered damage to their unit.
Rest assured: your co-owner insurance policy contains a coverage to cover the apportionment. However, to benefit from this coverage, you must be insured for the risk that caused the damage suffered and claimed by the syndicate (i.e., if the damage was caused by a sewer back-up, you must have this coverage in order for your insurer to cover the apportionment).
3. What if someone is responsible?
If you cause damage as a result of your negligence, or if damage is caused by a thing in your custody, you may be considered responsible. Your syndicate can then claim from you the cost of the repairs for the portions it is responsible for insuring. It will be up to you to prove that you have committed no wrongdoing.
For example, the water heater in your unit is considered to be in your custody. So if it fails or leaks for no apparent reason, you will need to demonstrate that you were not negligent with respect to its installation or maintenance.
In both of these cases, your insurer will take care of the claim as provided for in your civil liability coverage. If your negligence is proven, your insurer will pay for the damage you unintentionally caused.
4. Liability insurance: it's mandatory
Under the legislation, any co-owner must have insurance that covers their liability. The minimum amount to insure your condo unit depends on the number of units in your condo building:
- $1 million minimum if your building is 12 units or less;
- $2 million minimum if your building is made up of more than 12 units.
Liability insurance protects you when you unintentionally cause damage to another person or their property and if you are held responsible for it.
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