Unit Owner VS Condo Board Insurance
We understand the importance of protecting your condo with insurance. It can be confusing to navigate the different insurance options available.
In this post, we will provide an overview of the key differences between condo owners insurance and the building insurance.
We strive to provide accurate and up-to-date information, but it is always important to confirm with your insurance broker what your insurance policy covers.
Insurance policies and regulations are subject to change. We recommend seeking professional advice before making any decisions related to insurance coverage.
By the end of this post, we hope to provide you with a better understanding of the different insurance options available for your condo property.
Why you Need to Maintain Insurance
Condo insurance is an important investment for any condo owner or condo board in Alberta. This type of insurance helps protect your property from damage or loss caused by various risks, such as fire, theft, water damage, and other unexpected events.
Having condo insurance provides you with peace of mind, but it is also required to satisfy most mortgage requirements.
Normally, you will not be allowed to take possession of your unit prior to securing insurance.
Condo insurance premiums and deductibles vary depending on the type and amount of coverage you choose. However, the cost of not having adequate insurance coverage can be much higher than the cost of the insurance premiums.
What Does it Cost for Unit Owner Insurance?
Insurance companies use actuaries, who are experts in risk assessment and statistics. These professionals calculate insurance rates for insurance companies. They analyze data on past and present claims, evaluate risk factors, and use mathematical models to estimate the likelihood of future claims.
Each insurance company is unique and uses unique rate models. Typically, we see a very basic condo unit owner insurance policy start around $40 per month. The amount of personal property being insured will have a large affect on the price.
Condo Unit Insurance
As a condo unit owner, you are typically responsible for insuring, the contents of your unit, including personal belongings, fixtures, and improvements.
You are also responsible for any upgrades or improvements made to the unit, such as new flooring or cabinets, that may not be covered by the condo corporation’s insurance policy.
You are typically responsible for any deductibles associated with the condo corporation’s insurance policy in the event of a claim that involves common property or assets due to Owner’s negligence.
It is important to review your condominium corporation’s bylaws and consult with an insurance agent to determine the specific insurance requirements and responsibilities for your condo unit.
Condo Board Insurance
As per the Condominium Property Act of Alberta, the condo board is required to insure the condo corporation’s common property, including the building structure, hallways, elevators, and any shared facilities or amenities.
This insurance policy typically covers damage caused by perils such as fire, water damage, and weather events.
The condo board may also be responsible for insuring any assets or liabilities of the corporation, such as the directors’ and officers’ liability insurance, fidelity insurance, or equipment breakdown insurance.
Please contact the condo board, your property managers, or your insurance agent to learn more.
Loss Assessments and Special Assessments
Condo board insurance typically covers loss assessments, which are charges that are levied against condo unit owners by the condo corporation to cover the costs of repairing or replacing common property that has been damaged or destroyed.
For example, if a severe storm damages the roof of the condo building, and the condo corporation’s insurance policy does not provide full coverage, the condo board may need to issue a loss assessment to cover the shortfall.
In such cases, the condo board’s insurance policy may cover the loss assessment, which can help reduce the financial burden on condo unit owners. However, it is important to note that there may be limits to the coverage provided by the condo board’s insurance policy. For instance, loss assessments may be subject to deductibles, and the coverage may be limited to a specific dollar amount per unit or per incident.
As a condo unit owner, it is crucial to review the condo corporation’s bylaws and insurance policy to understand the potential for loss assessments and the coverage provided by the condo board’s insurance policy. You may also wish to consider purchasing additional insurance coverage, such as loss assessment coverage or unit owner’s insurance, to protect yourself against potential financial losses.
Understanding condo insurance in Alberta is critical for both condo unit owners and condo boards.
While the condo board is responsible for insuring the common property and assets, condo unit owners must insure their unit’s contents and any upgrades made to the unit.
It is essential to review the condo corporation’s bylaws and insurance policy and consult with an insurance agent or broker to ensure adequate coverage.
At Avenue Home Realty, we are committed to helping condo owners and condo boards in Alberta navigate the complex world of condos.
We encourage our clients to review their insurance policies regularly and seek professional advice whenever necessary to ensure they have the appropriate coverage in place.
Please contact us to learn more about our condo management services, including insurance-related support, and how we can help you protect your investment in your condo property.
