Published on 11.30.19
5 Common Misconceptions about Condo Insurance
If you live in Toronto and own a condo, you’re no stranger to the fact that it’s a large and valuable investment in the city. But still condo owners often assume they don’t need insurance for numerous reasons that are simply misconceptions and myths. Just like a home or a commercial property, you want to have insurance to protect one of your biggest investments and have peace of mind that your hard work is safe at the end of the day. We debunk five common misconceptions about condo insurance in Toronto and dive into how it can benefit you.
“My condo building has its own insurance so I don’t need to buy my own since it will cover my unit too.”
This is a very common misconception unfortunately but it’s just not true! Your building’s insurance most likely covers the building itself and amenities like the gym, patio, lobby and so on – not your individual, personal unit. If something were to happen to your unit or your belongings, the building insurance would not cover the costs or claims.
“Condo insurance won’t cover the unit, just the belongings inside so I don’t need it.”
Like other property insurance policies, condo insurance can cover much more than just the physical unit itself and your belongings. An important and valuable aspect of insurance that is often forgotten is general liability coverage. If you accidentally overflow your tub and cause water damage, you not only have to worry about your unit but the claims of your neighbours if it damages their unit too. All of their claims can be the most detrimental to the situation and then you have to worry about your unit too!
Condo insurance specifically can also cover damage to common areas that your building’s insurance cannot afford, forcing unit owners to help cover a portion as well – loss assessment. If your condo building does not have its own insurance or your unit is damaged and they do not have enough coverage to repair it, your own condo insurance can provide unit additional protection coverage.
“My condo policy covers all my belongings in my unit, even my jewelry and collectible comics.”
Similar to a home insurance policy, the contents insurance coverage in a condo insurance policy usually has special limits for special, higher value items like jewels, watches, furs, collectibles, bicycles, computer software and so on. This means that if a claim were to happen, your insurance coverage would not fully payout all of your belongings including these high value items; they would have special lower limits depending on the item and the claim.
That’s why it’s important to review your policy to make note of these limits and update your broker of changes throughout the year – especially if you know you own a special high value item or own several items that add up to a high amount. You can usually increase the limit or insure the item separately.
“I don’t need to worry about water damage; my condo insurance covers all types and kinds of water damage.”
This is also a common misconception with home insurance policies that your policy will cover any and all types of water damage. Typically, sewer backup and overland water damage are not automatically included in home and condo insurance policies. If these are both things you know your property are at risk of, coverage can be added on. Check out our other blog for a more in depth breakdown of types of water damage and what is covered by insurance.
“I rent out my condo to tenants, but they don’t need insurance because my condo policy will cover them too.”
To reiterate the first myth, your condo insurance policy is for your own unit and belongings. The same way it can cover your personal damage and claims that the building’s insurance won’t cover, your condo insurance policy won’t cover a tenant and their belongings; it is only meant for you, your unit and belongings. As a tenant or renter, they should obtain their own tenant/renters insurance to protect themselves and their belongings. This is something you should most likely recommend or even require of your tenant; it is a proactive way to avoid potential disputes or legal battles if a claim were to happen and your tenant does not have insurance.
Want to debunk some more insurance myths? We busted these 7 home insurance myths.
Like a home or commercial property, your condo can easily be one of the biggest investments of your lifetime – especially in a city like Toronto! Hopefully, we’ve been able to demystify some common misconceptions about condo insurance. At the end of the day, having condo insurance in Toronto is simply being about proactive and responsible with your hard earned investment. If you’re part of a tight knit condo community like Cityplace or want to team up with other condo owners, you can join Foxquilt and leverage the condo community for group insurance savings.