Condo Insurance Coverage Explained
Everything to Know about Coverage, Premiums, Deductibles
Written By: Mariko Baerg, REALTOR of Bridgewell Real Estate Group
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Condo insurance for strata’s in BC is a cost that can affect homeowners, home buyers, and home sellers. Whether it’s ability to obtain insurance, deductible coverage, or increasing premiums, understanding condo insurance is key when it comes to owning a home.
In this blog, we provide you with everything you need to know about strata condo insurance, including the differences, coverage, important terminology, requirements, cost of insurance, and more.
There is the strata’s condo insurance for the common property and exterior, and then there is the personal condo insurance for you to obtain for your unit and contents. This blog goes through the key differences for the coverage of each type of condo insurance and what they cover.
Keep reading for strata condo insurance explained!
What is Condo Insurance?
A condo is a multi-family building in which each owner owns their individual strata lot, and any area that is available by all unit owners is considered either common or limited common property.
When dealing with a condo, there are 2 separate types of insurance involved:
- The strata’s condo insurance
- Your personal home insurance
Your person condo home insurance provides coverage for the inside of your condominium; the external areas fall under the jurisdiction of your strata/condo association and must be covered under the association’s insurance policy.
The Strata’s Condo Insurance Coverage
When determining what your strata condo insurance covers, there is typically an insurance note that is provided from the property management company outlining the insurance coverage, deductibles, and insurance term for the strata and building. Your strata’s condo insurance covers:
- The buildings and structures shown on the condominium or strata plan and declaration
- Common property or elements such as hallways, stairs, roof, pools, garages, driveways, etc.
- Fixtures built or installed as part of the original or standard construction such as floor and wall coverings, and electrical and plumbing fixtures – some corporations have specific definitions for what is considered an “original” or “standard” unit
- Assets such as lobby furniture, building maintenance equipment, etc.
- Liability of the condominium or strata corporation for claims of property damage and bodily injury suffered by others.
Your Personal Condo Home Insurance
While the strata has insurance for the building and many common/exterior features, you will also need to obtain personal home insurance for the unit itself and personal property.
Your personal condo insurance may include coverage for:
- The interior walls
- Your appliances
- Your personal property and valuables (ie. Theft)
- Liability claims if you are found responsible for another persons injury or damage to someone else’s property (ie. via washer leak in to another unit)
- Covered loss, such as burglary or fire
- Deductible coverage
Is Condo Insurance Mandatory in BC?
Condo insurance is not mandatory in BC by government or law; however, if you are obtaining a mortgage, most lenders will include a condition on the mortgage commitment for you to purchase personal condo insurance.
Regardless, it is always a good idea to have coverage to protect your valuables, full deductible coverage, and yourself from liability.
Strata Insurance Increase BC
The strata insurance increase can really be broken down in to 2 parts:
- Strata Insurance Deductibles Increasing (Affecting homeowners cost of personal condo insurance)
- Strata Insurance Premiums Increasing (Affecting the cost of the strata’s condo insurance and annual budget)
To explain the details of the strata insurance increase in BC and how it affects both homeowners, home buyers, and home sellers, I’ve separated the two sections accordingly as seen below.
Condo Insurance Deductibles
The strata’s condo insurance policy has a stated deductible, much like ICBC, where you can still be responsible for paying depending on who is at fault for the damage and/or the amount of the damage.
For example, let’s say your strata’s condo insurance deductible for flood/all risks is $100,000.
If your washer leaks, damages units for the 3 floors below you, and it is deemed your fault then the responsibility for damages would fall back on your personal condo insurance. Furthermore, if the damage is less than $100,000 regardless of the fault, then the damages would fall back on your personal condo insurance.
Therefore, if the deductible is high this limits the amount of responsibility that the strata has to make an insurance claim on the strata policy, and instead diverts the responsibility to you. This is why it is important to have full deductible coverage.
Condo Insurance Premiums
Your condo association’s master policy, or HOA policy seen in the strata’s insurance note, will cover damage to your condo building, grounds and other external features. The cost of holding this insurance is factored in to the annual operating budget set out by the strata corporation, and paid for collectively by all of the homeowner’s via their monthly maintenance fee.
Therefore, if the cost of the strata insurance goes up by way of the premium increasing, then the overall operating budget will also increase. This is turn will likely cause an increase in maintenance fees.
How Much Does BC Condo Insurance Cost in 2020?
The cost of condo home insurance varies depending on how much coverage you choose, as well as your building’s strata insurance deductibles.
If the deductible is within $25,000-$50,000, then some home insurance policies will automatically include that coverage in the base amount in which you can estimate a cost of roughly $600-$700/year.
If your deductible is up to $100,000 or more, then you should expect around and over $1000/year in insurance costs.
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If you’re looking for a realtor to help you purchase a condo and understand the strata’s insurance coverage, then give us a call. Start a conversation by calling or texting 604-319-0200 or email [email protected]. We’re here to help.
