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Condo Insurance

Denise Lash
Heenan Blaikie LLP
The Home News - October/November 2010

Are you in the mood to try that new recipe? Rush home to your condo after work, put the pots on the stove and start creating! The phone rings right in the midst of your veggie chopping. It's Aunt Zelda from Boston. You get immersed in the conversation when you soon realize that you forgot about the pot on the stove. The damage is done. The laminate floor and the kitchen counter top - burnt and stained.

Now what?

When damage occurs in a condominium unit as a result of something that is caused by you or your occupants who pays?

Here are some of the questions that you need to answer to determine who is responsible for the costs:

1.  Is damage to the "standard unit" or is damage to an "improvement"?

2.  If the damage is to the standard unit, is this an insurable claim under the condominium corporation's insurance policy?

3.  If it is an insurable claim, do the costs for repairing the damage exceed the deductible portion of the corporations' insurance policy?

4.  If it is an improvement, do you have insurance coverage for this item?

The Standard Unit - Insurable Claim

Condominium Corporations must obtain insurance coverage for all the units and the common elements. Once there is an insurable claim, (for example, a burnt counter top or perhaps water damage as a result of an overflowing bathtub), then the Corporation's insurance policy should cover the costs to repair the damage, subject to any deductible portion that has to be paid by the owner.

The Corporation's insurance policy will only cover the "standard unit" and not anything in the unit that is considered an improvement. How do you know if it is an improvement or not? Check your condominium documentation. Many condominium corporations have "standard unit" by-laws which define what the standard unit is or there may be a standard unit list that was provided by the developer. Anything in your unit that is not listed in the by-law or the list, would be an improvement.

If there is no by-law or list, then the rule is - if it was installed in the unit as of the registration date of the condominium then it forms part of the "standard unit". Anything modified in the unit after the registration date, then becomes an improvement.

The Deductible Portion

Even if the damage is to part of the standard unit, if you are responsible for the damage, then you pay the deductible portion of the insurance claim. If the costs fall below the deductible amount, then you pay the whole shot. So, for example, if the costs to fix the flooring and the counter top amounted to approximately $2500, you may be out of luck when you find out that the Corporations insurance policy has a $5000 deductible.

Improvements

If you determine that the items are improvements, then you will need to check to see whether your own insurance policy covers those items. Many ownders will provide their insurance broker with a copy of the condominium's insurance policy and a copy of the standard unit by-law or list (if applicable). Sometimes you may be able to get insurance coverage under your policy for the deductible portion that you would have to pay under the condominium corporation's insurance policy.

Start the review process now to ensure that you have appropriate insurance coverage when those unexpected accidents occur.

 

Posted on Tuesday, November 9, 2010 at 01:51PM by Registered CommenterElaine in | CommentsPost a Comment

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