In this section, we'll look at some of the standard basic coverages available to condo unit owners through their home insurance policy.
All-risk contents coverage insures your belongings inside your home for the most common types of losses. When you have All Risk coverage, your contents are insured for everything, unless it's specifically excluded from your policy
Named-Perils coverage includes a list of the most common types of things covered under your insurance. Named-Perils include fire, theft and water damage. Everything is listed very clearly in your policy booklet so you have a complete and thorough understanding of what your insurance policy covers.
A standard home policy typically provides for the Actual Cash Value (ACV) replacement of your belongings. This means you only receive the value of the item, less depreciation. For example, if you purchased a TV 5 years ago for $500, you might only get $100 for it if it were destroyed in a fire. Even though it may cost you $600 to replace that same TV today, your insurance would still only give you $100.
Many people choose to add the Replacement Value option to their contents coverage. Replacement value coverage means that the contents of your home are insured for the amount it costs to replace them. When you replace the item(s) with a similar kind and quality, within a specified time, the insurer will pay you what it cost you to replace the item(s) not what they were actually worth in their used state. This means if your 5 year-old TV was lost in a fire, you would get the full amount it would cost to replace it, even if that is more than you paid for the TV in the first place.
Detached Private Structure
This type of coverage applies to structures that exist on your property, but that are not connected to your primary residence . For instance, a detached garage could be included under this coverage. There is usually a certain limit assigned to this kind of coverage, but you can always increase that limit by purchasing additional coverage options.
Additional Living Expenses
If you are forced to leave your home because of a loss, this coverage pays for your reasonable and necessary expenses to temporarily live away from home. Hotel and food costs are the type of expenses that would be covered under such circumstances. There is usually a limit on this kind of coverage.
Liability is a legal responsibility. Liability Insurance protects you from having to pay damages to people, if you've been found responsible for unintentionally injuring them or damaging their property.
Here are some examples:
- If someone injures themselves on the property you occupy, you may be responsible for damages. For example, if someone slips on your front steps, breaks their leg, and can't go to work, you could be held responsible for the person's lost wages.
- If you or a member of your family damages another person's property, you may be held liable. So if your son accidentally throws a baseball through the neighbour's window, and breaks an expensive antique, you may have to pay.
- The beauty of liability insurance is that it protects you anywhere in the world. Say for example, if your golf club accidentally flies out of your grip on a Florida golf course, strikes and injures another player. Liability insurance would cover this accident.
Voluntary Payments for Medical Expenses
This covers medical costs if someone accidentally injures themselves as a result of your personal activities or the way you have maintained your building. It also covers injuries experienced by resident employees-- such as nannies or housekeepers -- while working for you. You don't have to be found liable to make a claim under this coverage, but some limits do apply and may be different from company to company.
Voluntary Payments for Damage to Property
The accidental physical damage to the property of others is covered. This may occur as a result of your personal activities or the way your building is maintained or used. It may also be caused by pets or animals that you own or care for, or by the actions of your resident employees. This type of coverage would also include the intentional acts of other insured individuals under a certain age (set by the individual provider). You don't have to be found liable to make a claim under this coverage, but some limits do apply and may be different from company to company
Improvements and betterments
Spending money to improve your residence increases the value of your investment. The Improvements and Betterments Protection compensates you for all the extras you've put into your condominium -- on top of what the builder originally provided for you, up to the limit of your replacement value.
Say for example, your unit was originally finished with a $5000 medium-grade carpet. You want to upgrade to a high quality carpet, valued at $10,000. The Improvements and Betterments protection will ensure you receive the full value of your new carpet in the event of a loss. So if there were a fire, and the builder only gave you $5000 to cover the value of the original carpet, the insurer would provide you with the remaining $5000.
Apart from insuring your betterments and improvements, you may also want to insure your condominium unit itself. This will make sure that you're protected should the corporation's insurance not fully cover a loss to your unit.
An important feature of a condominium insurance policy is loss assessment. This is when you share responsibility with others for common property. The insurer will pay, up to a stipulated limit, your portion of any special assessment that's valid under your condominium corporation's governing rules:
- if it's due to a direct loss that affects a shared part of the premises and if it has been caused by an insured peril
- if it's due to legal liability arising out of shared ownership of common areas of the condominium premises (for example - to compensate a visitor for injuries incurred by tripping over a frayed carpet in a corridor)
- providing that the assessment has not been made necessary because of a deductible in the corporation's own insurance policy.
Property and home insurance quickguides
- Introduction to property insurance in Canada
- Standard home coverages
- Standard condo coverages
- Standard tenant or renters coverage
- Beyond basic coverage
- How insurance is calculated
- How to reduce your insurance premium
- Taking advantage of insurance discounts
- Special situations