Condo Insurance Coverage Explained: What Ontario Owners Need

If you own a condo in Ontario, you are usually dealing with two insurance policies at once: the one the corporation carries for the building, and the one you may carry for yourself. It is common to assume the corporation's policy covers everything inside your unit. That assumption can be expensive.

This article explains in plain terms how the two layers fit together, what your own policy is usually meant to fill in, and why deductibles and loss assessment coverage matter. Your building's own documents decide many of the details, so treat this as a starting point for questions to ask.

The corporation's policy and yours are different layers

The law requires a condo corporation to carry insurance and never let it lapse. That coverage must include damage to units and common elements, liability for failing to keep common areas safe or from using machinery, and directors' and officers' liability.

The corporation's property insurance does not cover improvements or non-standard elements of units. Fixtures, furnishings, equipment and personal property are generally not part of a standard unit, which each corporation defines in its governing documents.

In practice, the corporation insures the building and the standard unit as defined in its documents. Your policy is meant to cover what sits outside that definition.

What your own policy is meant to cover

The Condominium Authority of Ontario says owners should strongly consider property insurance for upgrades, fixtures, furnishings, equipment and personal property, plus possibly legal expense insurance. These are the usual building blocks:

• Contents: your furniture, electronics, clothing and other personal property.
• Improvements and upgrades: new flooring, custom kitchens, upgraded fixtures and similar work that goes beyond the standard unit.
• Legal expense coverage: an optional addition the CAO mentions as something to consider.
• Personal liability and additional living costs: these are not set out in the rules above, so ask your insurer what is included and what limits apply.

The key point is that damage to anything outside the standard unit is your responsibility to repair, however the damage was caused. If a pipe bursts and ruins your upgraded flooring, the corporation's policy generally will not pay for it.

Deductibles and loss assessment coverage

Every insurance policy has a deductible, the amount paid before the insurer pays. If damage is caused by an owner, tenant or resident, the corporation can charge the owner the lesser of the repair cost or the corporation's insurance deductible.

Some corporations go further. They have by-laws that make owners pay the corporation's deductible in more situations, including where no one is directly at fault. Owners exposed to this may need their own coverage for it, often called deductible or loss assessment coverage. Deductibles can range from a few hundred dollars to tens of thousands.

Whether your building has this kind of by-law depends on its own documents, so read them or ask the corporation before you decide what limit to buy.

Who deals with what

What to do next

Before you buy or renew a policy, take a few practical steps so the coverage matches your building.

• Find the definition of standard unit in your declaration and by-laws.
• Ask the corporation whether it has a deductible by-law and what its deductible is.
• List your upgrades and keep receipts or photos, so you can show what you added.
• Show your insurer the by-laws and ask whether loss assessment coverage is included.
• Check whether your documents require owners to carry insurance.
• If the documents are unclear or a claim has been denied, speak with a lawyer before paying a large chargeback.

Frequently asked questions