Condo insurance vs. building insurance – everything you need to know
Young couple sitting on a condo balcony

There are so many things to think about when you’re buying a condo. You want to find the perfect unit in a convenient location that suits your lifestyle. Plus, you have to weigh out which place has the best amenities and condo fees that fit your budget.

But, there’s one more very important thing to consider in your search…your condo insurance policies (yes, there’s more than one type!). Get the scoop on the differences between these policies so that you can pick the best coverage for you. Then, you can settle into your new place knowing you’re protected.

Tip: Still undecided about whether to buy a condo? Check out our essential pros and cons list for buying a condo to help you decide.

Condo corporation insurance explained

Your condo corporation or homeowner’s association (HOA) will have an insurance policy of its own. It’s usually called a “master policy.” This is protection for the condo building in general. Part of your condo/maintenance fees typically goes toward the condo building insurance.

Did you know? In British Columbia, a condo corporation is known as a strata corporation. Their master policy might be called strata insurance.

What’s covered in a condo corporation insurance policy?

A master policy would usually protect the common elements and shared spaces of the building. Areas like the lobby, swimming pool, fitness center, and event rooms are often included under this policy. Here’s what the condo building’s insurance typically covers:

  • Liability may cover legal and medical fees in a lawsuit if someone gets hurt in a common area which should be maintained by the corporation. For example, if someone slipped on an icy patch in the condo’s stairway entrance.
  • Property damage repairs or replaces the common areas if they’re damaged by something that the policy will cover. For example, a fire in the lobby or theft of gym equipment.

Heads up! If your condo corporation has an “all-in” policy, it may cover the original fixtures inside your unit. Keep in mind this probably wouldn’t apply if you’ve chosen upgrades or done renovations.

What isn’t covered by the condo corporation insurance policy and how it affects you

Your condo corporation insurance might seem like a good start, but what about your unit and your stuff? Are they covered? Let’s take a look at what the master policy doesn’t cover.

  1. This master policy doesn’t cover anything that’s inside your unit. Your clothes, appliances, furniture, jewellery, etc. still need protection.
  2. The master policy has a deductible. All unit owners might be made to cover the cost of the deductible in a claim. Condo owners may also have to pay additional costs if a payout goes beyond the policy’s limits, which can add up quickly.
  3. Maybe the building needs to be fixed for regular wear and tear and it’s not covered by insurance. Or perhaps the condo corporation doesn’t have enough money to pay for updates. In these situations, unit owners will be asked to foot the bill. That’s money out of your pocket. Learn what happened to these condo owners who faced paying extra for repairs in their aging building.

When you think about your unit and all the things you own, the condo corporation’s policy isn’t enough. So, what can you do to protect yourself? Don’t worry, there’s an easy solution – personal condo insurance. Having your own condo policy will help to fill these gaps.

Personal condo insurance coverage explained

Do you need home insurance for a condo? Well, there’s a special type of home insurance designed just for condo owners – condo insurance. And it’s highly recommended.

Is condo insurance mandatory?

Condo insurance isn’t mandatory in Canada. However, it’s wise to protect the big investment you’re making. In fact, most mortgage lenders and condo corporations require it. Condo insurance is not only for mortgage holders, though. Even if you’re mortgage-free, you’ll benefit from the financial protection it offers.

What does condo insurance cover?

Personal condo insurance covers much of what your condo corporation doesn’t. How? It’s designed to insure what’s inside your unit. Here’s a breakdown of what condo insurance usually includes.

  • Liability insurance could cover legal and medical fees in a lawsuit if someone gets hurt in your condo, or if you cause damage to another person’s property.
  • Personal belongings coverage ensures your stuff is protected from fire, theft, and more. Everything from your wardrobe to your electronics is covered. You get to choose how much coverage you need to protect your belongings – but it might depend on what the company offers.

Tip: Some expensive items like jewellery or art need a little extra protection. Learn how to look after your expensive stuff.

  • Extra expenses will help cover additional costs if you have to live somewhere else while your condo is being repaired because of a claim.
  • Unit improvement coverage makes sure that any upgrades you make like new cabinets, fixtures, or flooring will be insured if something happens in your unit.
  • Property loss assessment coverage (also known as special assessment coverage) helps when your condo’s master insurance policy doesn’t cover main building repairs. If unit owners are required to help foot the bill, we have your back (and wallet!).
  • Unit contingency coverage helps protect your unit if the master policy has no coverage or low limits.
  • Identity theft covers you and anyone else on your policy for specific costs if your identity is stolen.

Your condo insurance will have a deductible. This is the amount of money you agree to pay toward a claim. You’ll be given options to pick from so you can choose the right amount that fits your needs. Read all about deductibles here.

Heads up! It’s really important to review your own policy to know exactly what’s covered and what isn’t. If you aren’t sure how to check, definitely reach out to your insurance agent or broker. They’ll help you understand your policy.

How much is condo insurance?

The cost of condo insurance will vary based on your situation. It depends on your location, how much stuff you own, and more.

Did you know? With Sonnet the median cost of condo insurance is $470/year, which is only about $39 per month1. At a pretty reasonable price, it’s definitely worth it if you ask us!

Your condo corporation and you

You should be well-protected from the unexpected with your own condo insurance and the condo’s master policy. But, there is one more thing you can do to cover all your bases – have a good relationship with your condo corporation. This will help you enjoy condo living to the fullest and avoid stressful situations. Here are six tips to keep that relationship strong.

  1. Know the policies before moving in. You should understand the rules about pets, parking, noise, and using common spaces before you sign on the dotted line.
  2. Follow the rules and procedures in place. Make sure you know how to get permission before you make changes to your unit.
  3. Get involved. Volunteer for a project or serve on a community committee.
  4. Resolve issues with neighbours. Before complaining about noise to the board, take initiative and try to work it out with your neighbour first.
  5. Look over the maintenance fee schedule. Make sure to account for any fee increases that are scheduled to avoid surprises down the road.
  6. Plan ahead. In the long term, the building will need updates. Hopefully, the board manages the condo fees well. You should still be prepared with an emergency fund and condo insurance in case they don’t have enough cash in reserves for repairs.

At the end of the day, protecting your condo is definitely worthwhile. Take some time to understand your condo’s master insurance policy so that you know what to expect if a claim arises. And let condo insurance protect you from the rest.

Protect your condo and the things you love most. 1. Sonnet Condo Insurance