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Condo Insurance: Do I Need My Own Insurance Policy if I Own a Condo Unit?

Close-up of a man sitting at a desk and holding a calculator while talking to a client who is pointing out on a miniature condominium building

Congratulations, you are now the proud owner of a condo. Now you are probably wondering what type of insurance you need and whether you need it at all. 

The condominium corporation—the legal entity that encompasses all those who own shares in the development—is required to take out and maintain insurance on the common property and sometimes the individual units against perils such as fire, hail, and flood, in accordance with the bylaw.

But you need your own insurance policy to cover improvements that you make on the condo once you own it. The insurance for the condominium corporation won’t cover these improvements or your belongings unless otherwise specified by the bylaws laid out by the corporation.

Insurance and what it does and does not cover is not something that you should gamble with. If something happens, such as a fire or flood, you want the peace of mind that your home and belongings are financially protected. Insurance is a requirement in every real estate transaction.

Do I Need My Own Insurance Policy if I Own a Condo Unit?

While you’re not legally required to have condo insurance in Alberta, it is advisable that you do because your belongings and any improvements you make in your condo are not typically covered under the condominium corporation’s insurance.

The common property of the condominium generally includes:

  • Lobby and hallway areas
  • Landscaping and sprinklers
  • Rec rooms, fitness centres, and other shared spaces
  • Plumbing, electrical wiring, and furnaces
  • Roadways, parking lots, and parkades

So, a good portion of your home may be covered in a disaster, but much will not be. Some things that you may be responsible for covering yourself could include:

  • Your contents and personal belongings
  • Any deductible in the condominium corporation’s insurance policy, which the unit owner may become liable to pay
  • Improvements and betterments you made to the unit
  • Accommodation costs in the event you are forced to vacate the unit due to damage or safety concerns

Levels of Insurance Coverage

Home insurance is a broad term that can be broken down in several ways. First, the coverage can be broken into 4 levels. It is important to discuss your insurance with an experienced professional. They can discuss your needs with you and help you get the right insurance coverage.

Comprehensive

As the name implies, comprehensive coverage covers your home and belongings for most risks other than those specifically excluded from the policy. You also typically have the opportunity to purchase optional coverages for specific things like floods, earthquakes, and sewage backup.

Basic or Named Perils

Your insurance policy only covers things that are specifically stated in the policy when you have basic or named perils coverage. This could mean you have fire and flood coverage only, for example.

Broad

Broad coverage is almost a combination of basic and comprehensive. You typically have comprehensive coverage on the major items, such as the building, then have named perils coverage on your belongings.

No Frills

Not all insurers offer no-frills coverage. This form of coverage can cover property that does not meet the normal standards required for insurance. Making corrections can help you qualify for better coverage in these instances.

Types of Insurance

There are 2 major types of insurance to consider when you purchase a condo.

Condo Insurance

Condo insurance, can cover many things, including:

  • Your personal belongings
  • Living expenses incurred if you are displaced
  • Upgrades or improvements you make to the property, such as hardwood floors, customer countertops, or other upgrades
  • Coverage that comes into account if the corporation’s insurance is insufficient

It is important to note that not all policies are equal. Ensure you read your policy carefully and have a professional explain any details that you do not understand.

Personal Liability

Personal liability can be a beneficial addition to your home insurance policy. It essentially covers you if you are held liable for accidental bodily injury or property damage. Personal liability coverage can help offset or prevent legal fees related to court costs, medical bills, or property damage settlements.

What if You Are Renting a Condo?

You should still have an insurance policy to protect your belongings if you are renting a condo from someone else. This type of insurance is typically called tenant or renter’s insurance. Each policy varies, but they often include personal liability insurance, contents insurance, and some additional living expenses.

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Discuss Your Options with a Professional

Insurance can be complicated and full of legal jargon. It is important that you understand what you are paying for to avoid potentially having an insurance claim denied, which could add enormous stress to an already stressful situation.

Call our team at KH | Dunkley Law Group to set up an appointment with one of our experienced lawyers. We are happy to review your insurance needs with you and go over your policy to ensure it provides you with sufficient coverage.

This memorandum is for informational purposes only, does not constitute legal advice or an opinion, and does not create a solicitor-client relationship. This is an overview and is not intended to be a complete and exhaustive explanation of the concepts covered. This information may become inaccurate based on passage of time or changes in the law. Nothing herein should be relied upon without seeking the advice of a lawyer.

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Visit our main office or make an appointment to see us at our Central or South Calgary locations.

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Our Address

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  • Calgary, AB T2E 7C8

Phone: 587-323-4155

Fax: 587-318-6755

Email: [email protected]

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  • Calgary, AB T2G 1Y9

Phone: 587-323-4169

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  • #300, 340 Midpark Way SE
  • Calgary, AB T2X 1P1

Phone: 587-323-4155

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Reference Materials

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Close-up of a man sitting at a desk and holding a calculator while talking to a client who is pointing out on a miniature condominium building

you need your own insurance policy to cover improvements that you make on the condo once you own it […]

Read More… from Condo Insurance: Do I Need My Own Insurance Policy if I Own a Condo Unit?

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You must typically deal with dower rights in the context of selling a home when there is a married couple with only one of their names on the title. The Dower Act protects a spouse who is not on the title of their home from having their home sold without their consent—the titled spouse must […]

Read More… from What are Dower Rights in the Context of Selling a Home?

A lawyer pointing to documents while discussing with a client

Another crucial detail in Alberta real estate is a real property report (RPR), an important document ensuring municipal compliance, and most Alberta real estate transactions require it. […]

Read More… from What Is a Real Property Report in Alberta & Who Needs One?

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