What does the condo corporation's insurance cover versus what I need for my unit in Ontario?
Ontario's Condominium Act, 1998 requires every condominium corporation to maintain property insurance on the units and common elements for their replacement cost and liability insurance for the common elements. The corporation's policy typically covers the building structure, common areas, and the standard unit as defined in the declaration (including original fixtures like cabinetry, flooring, and plumbing at the level originally installed by the developer).
The corporation's insurance does not cover your personal belongings, your unit improvements or upgrades above the standard unit, your liability as an owner, or certain deductibles. If the corporation's policy has a large deductible and a loss originates in your unit, the Act allows the corporation to charge that deductible back to you.
As a unit owner, you should carry your own condo owner's insurance policy (sometimes called "condo unit owner" or "HO6" coverage). This covers your contents, upgrades, additional living expenses if you're displaced, personal liability, and can cover the corporation's deductible chargeback.
Key takeaways
- The corporation insures the building and standard unit; you must insure your contents and upgrades.
- Corporations can charge deductibles back to owners when a loss originates in their unit.
- A condo owner's insurance policy fills critical gaps left by the corporation's policy.
- The corporation's insurance policy and the standard unit definition should be reviewed at purchase.