Who insures what and how does liability coverage work?

It’s easy to see the appeal of condominiums. There’s no yard work yet the grounds always look beautiful. In fact, maintenance of nearly all types is reduced. You’ll never pay directly to replace the roof or siding. But part of what makes condominiums attractive is also what makes the insurance for condos a bit more confusing. Who insures what and how does liability coverage work?

Your condominium corporation has insurance to cover many of the risks to the property but there are limits to their coverage and that’s where your own condo insurance policy picks up the reigns. Typically, the policy for the condominium corporation covers the buildings, common property, and fixtures built into standard condo units. The best way to understand what your own policy covers is to think of it as coverage from the studs inward. The condominium corporation’s coverage usually includes coverage for a “standard” unit, whereas your insurance may provide for upgrades.

Let’s say a standard unit is defined as having laminate floors. If you upgrade to hardwood floors, your condo policy covers the upgrade in the event of a covered claim. The same is true of custom countertops and other common interior condo improvements.

Another big consideration is liability coverage. The condominium corporation maintains liability coverage that applies in common areas, but that coverage may not apply within your home itself. There are also other situations that can create personal liability, like a candle in your home that causes a fire and damages other units.

Of course, your condo insurance policy also provides protection for your personal property, including your furniture, your clothes, appliances, electronics, and other items. It’s important to discuss this coverage with your broker — especially if you have valuables. Many condo insurance policies have coverage limits for valuables that can be addressed with riders to customize your coverage and fill coverage gaps.

If you haven’t reviewed your condominium insurance recently, reach out to your broker for a review. Life happens quickly and you’ll want your coverage to match your needs as they change.

Have any questions? We can help.

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