Insurance

Condominium corporations must get insurance to protect themselves and their assets from damage and liability. Owners should also strongly consider getting insurance.

Condo corporations are legally required to maintain insurance and to make sure their policies never lapse. Insurance protects condo units and common elements from damage and the corporation from liability.

Condo corporations are required by law to be insured against:

• Damage to units and common elements
• Liability resulting from breach of duty to keep common areas safe or use of machinery
• Liability for directors and officers of the corporation being held personally liable while carrying out their duties. This type of insurance does not apply to directors that do not act in good faith.

A corporation’s property insurance covers damage by major perils like fire and flood to common elements and units but does not cover any improvements or non-standard elements of those units. Owners should check their condo corporation’s governing documents so they may understand how their corporation defines a standard unit and what elements of the unit they are responsible for insuring on their own. Generally, fixtures, furnishings equipment and personal property are not considered as part of a standard unit. Owners should keep their own insurance for these and may be required to do so by their corporation’s governing documents. Check out our page on Repairs and Maintenance for more information.

If owners lease out their unit, their tenants are not legally required to have tenant insurance but a tenancy agreement or the condo corporation’s governing documents may require them to have it. Owners should encourage tenants to have insurance.

Owners may protect themselves in these situations by taking out Legal Expense Insurance that covers their lawyer or legal fees. Owners may have access to LEI without being aware of it, as some homeowner condo insurance policies contain a form of LEI. It is important to know what is included in your condo insurance policy.

Deductibles are payments that insurance policy holders must make before insurance companies will release funds to cover claims. Depending on the policy, deductibles can range from a few hundred dollars to tens of thousands.

Owners are generally responsible for paying their own deductibles. Owners should understand that sometimes corporations may have by-laws that extend the circumstances in which they will be responsible for paying the corporation’s deductible to include situations where no one is directly at fault for any damage. Owners should take special care to understand their corporation’s insurance policy. If needed, owners should speak to an insurance broker so they can understand if they need to purchase a plan that covers them for situations where they are responsible for paying the corporation’s deductible.