Why condo insurance coverage is important
Purchasing insurance coverage for your condo is similar to purchasing insurance for your home. The purpose is to limit the financial impact of loss to your space and your belongings. If you suffer theft or damage to your condo due to a home invasion, flood or fire, condo insurance will cover some of the costs to replace or repair your space and items. However, there are some significant differences when purchasing home insurance versus coverage for your condo.
Protect your personal belongings
Condo insurance should protect your part of the building, i.e. your condo unit. The building owner will have insurance to cover the building structure, such as the roof and foundation, as well as the common areas such as hallways, elevators and stairwells. Condo owners purchase insurance to protect ttheir unit, as well as their personal belongings, appliances and furniture within the unite.
The best way to get an accurate insurance quote is to take an inventory of your personal items. Having an updated list with all items, the year of purchase and the purchase price, will also help speed up the process if you ever need to file an insurance claim.
You don't own the building
When purchasing home insurance you are choosing coverage that includes the cost of the home's structure, land and your personal belongings. That is not the case with condo insurance. When purchasing coverage for your condo, talk to your insurance provider about the value of your unit and possessions.
Common areas in the building such as walkways and parking spaces are the responsibility of the building owner. It's important to only purchase the insurance coverage that you need, because otherwise the cost of your premiums are a waste of money.
Limit damages to others
In addition to your personal items, condo insurance can also help protect you and your guests if they are injured or suffer a loss while in your unit. When you own a home, if someone slips and falls inside or outside of your house, you as the homeowner are liable for all damages and expenses. Condo insurance doesn't operate this way.
Your condo owners insurance covers everything inside your unit. Having condo insurance is important to limit the financial loss if a third party is injured while in your home, or if another resident incurs damages due to actions from your unit.
As an example, if a pipe bursts in your unit and the water leakage causes damage to the structure of the building, you may be held responsible and need to file an insurance claim. If the water leakage causes damage to another unit in the building, you may also be held liable to cover the repair and replacement costs for your neighbour. Injuries that occur outside your unit, such as the parking lot, lobby or pool, are the responsibility of the building, requiring no action from you.
Abide by your condo agreement
Another reason that purchasing insurance coverage for your condo is important is because you may be legally required to do so. Just as all drivers need to have car insurance, condo owners are usually required to have insurance. Read the fine print in your condominium agreement to determine the amount of coverage you need to purchase, as well as any additional specifications.