Condo insurance and homeowners insurance are very similar in that both insurances provide the owner with coverage for the structure of their home itself, their personal property, as well as protection against liability claims should the homeowner be found liable. The difference between the two insurances lies in the coverage for the structure of the home. A homeowners insurance policy covers both the outside and inside structure of the dwelling. In most cases a condo association's insurance is limited to covering part of the structure, usually the exterior of the building, common use areas and the condo building surroundings. Therefore, condo owners are required to purchase their own condo insurance to protect the inside of their individual unit.
A condo association's master policy can be one of two types – an “all-in” policy which covers the fixtures of your condo such as carpets and fitted appliances, or a “bare walls-in” policy which does not cover anything contained within the walls of your condo.
Depending on your condo association's master policy, condo insurance can provide cover for:
Building property protection
Provides cover for the interior of the property including walls, floors, ceilings and built in furnishings e.g. cabinetry, that are considered for your sole use and not that of other condo owners
Personal Property coverage
Cover for your personal belongings inside the condo, including appliances. Limits may apply and you may need to purchase additional coverage for high-value items, for example artwork and jewelry
Personal Liability coverage
Protects you if someone is injured on your property or you damage someone else’s property and are found to be liable. Such coverage includes legal fees and medical expenses where applicable. The liability coverage works in tandem with the Association’s insurance which covers common area liability only
Loss of Use coverage
In the event that your condo becomes uninhabitable as a result of a catastrophe, your insurer
will cover the relevant increased costs related to alternative accommodation, such that you and
your family can continue to maintain your current standard of living
When deciding the type of condo insurance you require and the value to be covered for, it’s worth speaking to your Condo Association to understand the level of protection you are afforded under their specific master policy. This way you are not purchasing insurance you don’t need, nor are you under-insuring your home.