Insurance and condo corp vs condo unit owner
The condominium corporation owns the building. If there is a claim then everything should be covered, right? So why should I buy condo insurance for my unit?
You need to understand that the condominium corporation insurance policy will not be buying you new clothing nor will they provide you with temporary accommodation. Your insurance policy will do this. The costs to replace your improvements and betterment can also be included in the claim. The other important consideration is your world wide personal liability for injury to property or persons that is part of your unit owner insurance.
A condominium unit owner has his/her individual unit from the inside walls or in a strata property the individual lot. The condominium corporation has the common property - everything else including sidewalks, lobby, stairwells, hallways and could include portions of the floors and walls which are part of the overall building structure.
The condominium corporation also is required to maintain insurance for the common property but also the basic structure including the original flooring, wallpaper, and plumbing. This makes it very important when you are buying a pre-owned unit to know what is original and what is an improvement or betterment.
Water damage claim
So what can happen in a claim when there is water damage? There have been two recent decisions in the B.C. Supreme Court, Strata Plan KA 1019 v. Keiran 2007 and Mari v. Strata Plan LMS 2835 2007.
If the water damage is to common property and to an original fixture such as the flooring then the corporation's property policy covers the claim. However, the owner of that unit may be held responsible for the damage that caused the claim and so will be assessed the deductible. A deductible for a corporation can be $10,000 or $25,000. If this is the case then you do have a consideration within a condominium unit owner policy to pay for assessments such as the deductible.
The ruling in the case of Mari and Kieran is that even when the property damage is caused not by the fault or negligence of an individual unit owner but simply due to defective plumbing or a malfunctioning appliance, that the condominium unit owner may still be held responsible for the damage. The condominium unit owner will be required to reimburse the condominium corporation for the deductible portion of the insurance claim.
Do you have deep enough pockets to pay the costs if you accidentally start the fire that burns down the condo building?
Condominium unit owner's policies are usually quite inexpensive. If you have an auto policy there could be an additional discount so it is even cheaper! Unfortunately thieves can and do get into condo buildings so you can still come home to find your home ransacked and everything gone. You can accidentally leave that tap on and have the floors warped and needing replacement due to the water damage.
Take control of your insurance. Find out what is available and what is the cost. Then make your decision with the knowledge that you have weighed your risk.