What you need to know about insuring a condo in Canada
With prices for single family homes rising dramatically in recent years, condominiums have skyrocketed in popularity in major cities like Toronto.
You may have done some reading on owning a home, but there are a few fundamental differences between being a homeowner and being a condo owner. One of those differences is in how you protect your largest asset.
Here’s what you should know when insuring a condo in Canada.
Is there a difference between homeowner’s insurance and condo insurance?
The simple answer is yes. While condo owners are homeowners, the traditional homeowner’s insurance policy is designed to service different needs than a condo insurance policy. Even though you took out a mortgage and became a property owner just like you would for a single family home, buying a condo unit makes you part of a condo association with certain rules and benefits that affect your insurance. For that reason, make sure you seek out an insurance broker that can find condo insurance and not just home insurance.
Condo insurance is designed primarily to cover just your unit and its contents against:
- Theft
- Vandalism
- Fire damage
- Storm damage (hail/lightning/snow)
- Water escape and rupture damage
- Personal liability
Just like standard home insurance, extra coverage for perils like flooding or high-value items are available, but you have to mention that you need the extra when you’re taking out your policy.
Your condo association coverage determines how much structure insurance you need
Depending on your condo association, you may already have some protection included with your unit. Your condo owner association usually has insurance on the main building and public areas, but when it comes to insuring the interior of your condo unit there are two types of plans you can expect:
- All-in coverage: the association likely covers most of your unit’s structure. In this case, you need to know specifically what parts of your unit are covered, and what you need to include on your personal policy.
- Studs-out coverage: the association leaves the responsibility of covering everything inside your unit’s interior walls. In this case you want a condo insurance policy that includes the cost of rebuilding your whole unit should it be destroyed.
You may just need tenant’s insurance
If you’re a condo owner, condo insurance is the solution for you. However, if you are renting a condo, you need tenant’s insurance. Even though the content coverage is very similar, as a tenant you won’t have to worry at all about structural coverage.
Owning a condo can be a lower-maintenance approach to owning property and can provide you with some distinct advantages, especially for urban living. If you’re interested in buying a condo, make sure you take a look at this step by step guide, and don’t forget to shop for condo insurance when you’ve found your dream unit.