Condo insurance for strata properties in BC is a cost that impacts home owners, home buyers and home sellers. Whether it's the ability to obtain insurance, deductible coverage, or increasing premiums, understanding condo insurance is essential when it comes to owning a home.
What is Condo Insurance?
A condo is a multi-family building where each owner owns their individual strata lot, and any area shared by all unit owners is considered common or limited common property. When dealing with a condo, there are two separate types of insurance involved:
- The strata’s condo insurance
- Your personal home or "contents" insurance
The Strata’s Condo Insurance Coverage
To understand what your strata’s condo insurance covers, a detailed insurance note is typically provided by the property management company. This note outlines the insurance coverage, deductibles, and terms for the strata and building. The strata’s condo insurance generally covers:
- The buildings and structures listed in the condominium or strata plan and declaration
- Common property or elements such as hallways, stairs, roofs, pools, garages, and driveways
- Fixtures built or installed as part of the original or standard construction, such as floor and wall coverings and electrical and plumbing fixtures (definitions of “original” or “standard” units may vary by corporation)
- Assets like lobby furniture and building maintenance equipment
- Liability for property damage and bodily injury claims suffered by others
While the strata’s insurance covers the building and many common or exterior features, personal home insurance is required for your unit and belongings. Your personal contents insurance may include coverage for:
- Interior walls
- Appliances
- Personal property and valuables (e.g., theft)
- Liability claims if you’re found responsible for injuries or property damage (e.g., water leaks damaging other units)
- Losses such as burglary or fire
- Deductible coverage
Condo contents insurance is not mandatory in BC by law; however, some lenders require it as a condition for obtaining a mortgage. Regardless, it is always advisable to have coverage to protect your valuables, ensure deductible coverage, and safeguard against liability.
Condo Insurance Deductibles
Strata insurance policies have stated deductibles, similar to car insurance, where the responsible party may need to pay depending on the cause and amount of the damage. For example, if your strata’s deductible for flood/all risks is $100,000, and your washer leaks, causing damage to units below, the responsibility for damages could fall on your personal condo insurance. If the damage is less than $100,000, regardless of fault, your personal insurance covers the costs. High deductibles reduce the strata’s responsibility for claims, shifting the burden to individual owners, making full deductible coverage crucial.
Condo Insurance Premiums
Your condo association’s master policy covers damages to the building, grounds, and other external features. The cost of this policy is factored into the strata’s annual operating budget and paid collectively by homeowners through monthly maintenance fees. Increases in insurance premiums lead to higher operating budgets and, consequently, increased maintenance fees.
How Much Does BC Condo Contents Insurance Cost?
The cost of personal condo insurance depends on the coverage amount and the building’s strata insurance deductibles.