Four Common Misconceptions About Condo Insurance That Could Be Putting You at Risk
by adminWhen it comes to condo insurance, many owners think they’ve got it all figured out—but the truth is, there are some common misconceptions about insurance coverage that could leave you seriously exposed if things go wrong. Whether it’s assuming your strata insurance has you covered or believing you don’t own anything worth insuring, these myths can lead to costly mistakes.
#1: I Don’t Need Condo Insurance Because My Strata Already Has Insurance
This is probably the biggest misconception condo and townhome owners believe to be true, and it often winds up being one of the costliest. Strata associations are required to have insurance for the building, common areas, and shared spaces; however, this coverage does not extend inside individual units. That means any damage to your personal belongings, unit upgrades, or liability for accidents inside your condo falls on you. Without your own policy, you could face significant out-of-pocket expenses.
Take for example a situation where a major building fire renders your unit temporally uninhabitable. The condominium insurance will cover all damages and repairs, but it will not cover your personal belongings or the cost of temporary accommodations.
#2: Condo Insurance Is Just for Contents
Some people opt out of condo insurance because they assume the coverage is for the contents of their unit only, and they are okay with risking their personal belongings by forgoing insurance. The reality is, that condo insurance provides coverage for much more than just lost valuables. Policies generally include liability protection, and coverage for upgrades you’ve made to the unit (like new flooring or cabinetry), and will even provide funds for additional living expenses if your unit becomes uninhabitable due to a covered event.
Imagine a situation where your bathtub overflows and causes damage to common areas and neighbouring units. While damages may be covered under the strata insurance, you could be held liable for the deductible, which is often tens of thousands of dollars on condominium policies. If you have deductible assessment coverage your condo insurance could cover these costs.
#3: If I Rent Out My Condo, My Insurance Will Cover Tenants
For condo owners who do have insurance, many believe that this coverage will extend to tenants if they choose to rent the property. This is false. While condo insurance may cover things like major appliances from renter-caused damage, it will not extend to their belongings, liability claims, or additional living expenses should damage to the unit force them to temporarily find other accommodations. If you’re renting out your condo, you should require tenants to have their own renters insurance and review your own policy to ensure it includes landlord-specific coverage.
#4: Condo Insurance Is Too Expensive
A lot of people believe that condo insurance will be another large monthly expense they simply can’t afford. In reality, condo insurance is often very affordable, especially compared to the potential costs of repairing damage, replacing belongings, or dealing with a liability claim. For example, the average insurance cost for a 1-bedroom condo in Surrey is under $40 per month. It’s also important to remember that personal condo insurance isn’t a one-size-fits-all product, and by working with a broker you can’t get a tailored condo insurance policy that fits your needs and your budget.
Final Thoughts
While we all hope you will never need it, it’s important to know that condo insurance isn’t just a formality—it’s essential coverage to safeguard your home, your belongings, and your financial security. Misconceptions such as those discussed here leave you vulnerable to significant losses. If you’re unsure about your current policy or what kind of protection you need, consulting with an insurance professional can help ensure you’re not caught off guard when the unexpected happens.