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Condominium living comes with shared ownership and shared insurance responsibilities. While condo corporations insure the building structure and common areas, individual unit owners are typically responsible for insuring their personal property, improvements, and liability risks within their unit.

Understanding how condo insurance works and where gaps may exist can help owners better prepare for unexpected losses. Learn what is generally included in an Ontario condo insurance policy, what may not be covered, and optional enhancements often considered by condo owners.

What’s Typically Covered by Condo Insurance

Most standard condo insurance policies in Ontario include the following core protections:

1. Personal Contents: This covers your belongings inside the unit, such as furniture, electronics, clothing, and décor, if they’re damaged or stolen due to insured events like fire, smoke, theft, or certain types of water damage.
2. Unit Improvements and Betterments: If your condo has been upgraded beyond the builder’s original finishes—think hardwood floors, custom cabinetry, upgraded countertops, or renovated bathrooms—your policy helps cover the cost to repair or replace those improvements after a covered loss.
3. Personal Liability: Personal liability coverage protects you if someone is injured in your unit or if you accidentally cause damage to another unit or common area (for example, a kitchen fire or water leak spreading to neighbouring units).
4. Additional Living Expenses: If a covered claim makes your unit temporarily uninhabitable, this coverage can help pay for hotel stays, meals, or short-term rentals while repairs are completed.

What’s Not Often Covered (or Limited)

This is where many condo owners get caught off guard:

1. Standard Unit Definition Gaps: Condo corporations insure the building, but what they cover depends on the condo’s standard unit definition. Some cover only bare walls and floors, while others include basic fixtures. Anything beyond that may fall to the unit owner.
2. Water Damage Limitations: Not all types of water damage are automatically covered. Sewer backup, overland flooding, or seepage may be excluded unless added by endorsement.
3. Loss Assessments (Without Enough Limits): If the condo corporation suffers a major loss and its insurance isn’t sufficient, owners may be assessed a portion of the repair costs. Basic condo policies may include limited loss assessment coverage, which may be insufficient for large claims.
4. Loss and Divided Deductible: This may occur if there is an insurable loss and the Condo Corporation has to pay a large deductible, and this deductible is often divided among the condo unit owners.
5. Wear and Tear or Maintenance Issues: Damage caused by neglect, gradual deterioration, mould from ongoing moisture, or poor maintenance is typically excluded.

Common Riders Condo Owners in Ontario Should Consider

An insurance rider, also called an endorsement or amendment, is an optional add-on that modifies a standard policy to provide additional coverage, typically at an additional cost. Many condo owners choose to enhance their coverage with these common add-ons:

1. Increased Loss Assessment Coverage: This helps protect you if the condo corporation charges unit owners for a special assessment following a major insured loss.
2. Sewer Backup Coverage: Especially important for ground-floor or lower-level units, this coverage protects against damage caused by backed-up drains or sewer systems.
3. Higher Contents Limits: If you own high-value items such as electronics, art, jewellery, or collectables, increasing contents coverage or scheduling specific items, can help prevent underinsurance.
4. Deductible Protection: Some policies offer protection to help cover high deductibles charged by the condo corporation when a loss originates from a common area.

Why Condo Insurance Deserves a Second Look

Condo insurance is not a one-size-fits-all solution. Coverage depends on factors such as unit upgrades, location, condo bylaws, and the corporation’s insurance limits. Reviewing both personal coverage and the condo corporation’s standard unit definition can help owners better understand their responsibilities.

For those looking to obtain condo insurance coverage, quotes are available through HUB SmartCoverage.