YOU NEED 3 TYPES OF CONDO INSURANCE IN TORONTOBy CondoWong Saturday, November 16, 2019
As a condo investor, there are 3 types of condo insurance that you must know about.
#1 Building Insurance
This is covered under the condo corporation’s insurance policy and is included in your monthly condo maintenance fees.
A typical policy covers the building’s main structure, the common areas such as the lobby, elevators and the gym.
It also covers your unit, but only to the standard state.
For example, you upgraded all your kitchen cabinets and they were damaged by a fire
The building insurance will only cover the replacement of standard cabinets, any upgrades will not be covered.
#2 Owner Insurance
The building insurance already covers all the main items, why do you still need to pay for an owner’s insurance?
The main purpose of getting an owner insurance is to protect you, the owner.
The most important coverage is personal liability.
Let me give you an example.
Your tenant comes home from work, turns on the oven. She falls asleep on the sofa while her dinner gets cooked.
She smells something burnt. She turns off the oven immediately and opens the oven door.
Smoke bursts out and the sprinkler system goes off.
Your unit and your next door neighbours are all wet.
Who would be responsible for all the water damage?
That’s you. That’s when you need the liability insurance.
It’s insurance, so we need to factor in the worst case scenario even though it’s very rare.
I would recommend getting a personal liability coverage of $1 to $2 Million in your owner’s insurance policy.
A typical owner insurance is around $200 to $300 per year.
There are all sorts of different coverages that you can add on, just like any other insurance policy.
But the most important one to pay attention to is personal liability.
#3 Tenant Insurance
The tenant insurance covers the tenant’s belongings and liability
Again, liability coverage is important. If your tenant damages the building’s elevator and now needs to pay for it, then you know that your tenant is covered under the insurance.
A typical tenant insurance is around $200 per year.
In order to protect you, we make it a requirement for the tenants to purchase a tenant insurance with a minimum liability coverage of $1 Million.
We would never release the key to any tenants without an effective insurance.
So now when people talk about condo insurance, you know that there are actually 3 different types: building, owner and tenant.
All 3 are essential to protect you and your investment.
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