“My condo is my home, so why wouldn’t it be covered under a home insurance policy?” You might be asking yourself this question when moving into a new condo. Condo insurance is made to distinguish between an asset you purchase inside a building managed by a board and an asset you own entirely, such as a house. It safeguards the personal belongings you own and it provides defense against legal responsibility for mishaps that happen especially in your apartment. Condo insurance is not mandatory in most parts of Canada, but here’s why you should consider taking out a policy when you move into a condo.
Protect Yourself and Your Belongings
First and foremost, an insurance policy will protect yourself and your belongings in the case of an emergency, accident, or whatever else could happen that might cause damage. Condo insurance fills in the gaps that common insurance does not cover, such as the interior of your unit and personal possessions.
- Read: Comparing Costs: How Many Condos Equal the Price of an Average Single Detached Home in Canada?
Common Area Insurance
Most condo buildings have their own insurance, which you pay into through monthly condo fees. It is usually referred to as common area coverage. In Canada, your unit is typically covered by one of two types of common area coverages:
Restricted coverage: Nothing inside your unit’s walls is protected by this. Furthermore, it might or might not cover the plumbing and electrical systems connected to your unit. To secure their property, residents with limited coverage should get a better policy.
Fixture coverage: This includes items that are affixed to your unit by bolts, screws, nails, glue, cement, or other fasteners. This usually refers to carpeting, wiring, plumbing, and appliances. Your personal belongings are not covered by this, though.
What Does Condo Insurance Cover?
While every policy will be different there is a general list of things a condo insurance policy will cover. This includes a section for replacing personal property, help after loss (such as a fire or flooding), upgrades and improvements, and a section for personal liability. You are liable for what happens in your unit, such as accidents or injuries. For example, if someone is injured in the building’s elevator, the building itself would be on the hook for insurance. But if someone gets hurt whilst in your unit, you are responsible for covering any financial requirements.
Your Mortgage And Condo Insurance
Your mortgage lender will mandate that you obtain condo insurance if you have a mortgage. There will typically be minimum coverage requirements, which are specified in your lending terms. Before releasing your payments, the lender will also require proof of insurance to be supplied by your broker. In theory, though, you don’t need condo insurance if you don’t have a mortgage. However, it’s a wise decision to get insurance to assist in offsetting any potential losses if you’d prefer not to risk everything you own as well as your future earnings.
So, Do I Need Condo Insurance?
If you’re mortgage-free, then no, condo insurance is not required. However, if you want to keep peace of mind and not have to worry about yourself, your belongings, or potential accidents and injuries, investing in an insurance policy would be a highly beneficial financial decision to make.
Are you looking for the perfect condo? Give us a call today! One of the experienced agents at Zoocasa will be more than happy to help you through the exciting home-buying process!
