Tenant / Condominium Insurance

Your most valuable material possessions are probably your home and its contents. Could you afford to replace them? No? Then you, too, need insurance…not only to protect your belongings but also to help you meet your potential legal obligations to others.

Many insurance companies base their policies on the clear-language wording developed by the Insurance Bureau of Canada. While this pamphlet is a useful guide to typical policies, please remember that it is not a legal document. (If you own your home — and it’s not a condominium unit — please refer to Home insurance and you!)

• Tenant Insurance
• Condominium Insurance
• Cottages and other seasonal dwellings

Tenant Insurance
Do you know that your landlord has no legal responsibility to replace or pay for your personal possessions? If your possessions were damaged or destroyed in a fire or natural disaster, or if they were to be stolen, replacing them could be costly. Even if you don’t own your home, you still need insurance… to protect your possessions and to help meet your obligations to others, including your obligations to the owner of the home you’re renting.

Your first apartment? A word to the wise: If you’re in your first apartment, you may think you haven’t accumulated anything of real value yet. Think again! A small amount of furniture may not look as if it’s worth much, but when you have to replace it with something new, it could break your budget. If you’ve bought a CD player or furniture on credit and it’s destroyed by fire or stolen, you’re still responsible for paying the balance to your creditor, even though you now don’t have the item. That hurts!

Responsibility to others: Do you know that you could have a legal responsibility to replace an entire apartment building even though you may be renting only a small part of it? Your stove, for example, could catch fire, leading to damage by smoke, fire and water to the whole building. Or suppose a visitor were to be injured in your apartment and sued you; you’d be responsible for paying any legally awarded settlement. Without liability insurance, you could end up paying for a long, long time!

If you are a tenant, you can choose from a variety of insurance policies that remove much of the worry from renting.

Tenant’s Improvements coverage is an important consideration because policies generally have standard limits that are sometimes not high enough to cover all of the improvements that you may have made to your rented home.Such improvements could include broadloom, built-in cabinets or sound systems. You may need additional coverage.

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Condominium Insurance
Condominium dwellers experience some of the best aspects of home ownership and renting. As a condominium owner, you have title to your own “unit” as well as a share in common areas such as lobbies, for example, or perhaps a swimming pool, parking garage, or garden. The nice part about condominium living is that you are a shareholder in the corporation from which you “rent” access to the common areas. The no-so-nice part is that you and your fellow owners can be held personally liable if things go wrong. A condominium insurance policy is a low-cost way to worry-free condominium ownership.

Loss assessment coverage is an important feature of condominium insurance because you share responsibility with others for common property. The insurer will pay (up to a stipulated limit) your portion of any special assessment that is valid under your condominium corporation’s governing rules:

• if it is due to a direct loss that a) affects a shared part of the premises, such as the lobby or an elevator) or b) has been caused by an insured peril
• if it is due to legal liability arising out of shared ownership of common areas of the condominium premises (for example: to compensate a visitor for injuries caused by tripping over a frayed carpet in a corridor)

The assessment must not have been made necessary because of a deductible in the corporation’s own insurance policy.

Normally, the condominium corporation’s own insurance coverage will be adequate; insurance-related special loss assessments are not very common.

Condominium owner’s improvements (usually called “tenant’s improvements”) coverage is an important consideration as most policies have standard limits which may not be high enough to cover upgraded broadloom, for example, or built-in cabinets or sound systems. You may wish to consider buying extra coverage.

If you own a condominium unit, you can choose from a range of insurance policies that will enhance your enjoyment of your home. Certainly, you’ll want to insure the contents of your home, and you may wish to insure your condominium (excluding improvements) separately from the condominium corporation so that you would be protected, should the corporation itself not be adequately insured.

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Cottages and other seasonal dwellings
If you have a cottage, you may wish to have it insured as part of the same policy as your condominium or tenant insurance. Coverage is usually more limited than with dwellings that are occupied year-round and are close to water mains, police and firefighting services. Burglary can be purchased, but not theft; in other words, for a claim to be considered, there must be signs of forcible entry. Vandalism and malicious acts are not covered either, but can often be purchased separately.. In winter, make sure that snow does not accumulate on the roof; a collapse due to the weight of snow would not be covered. Your agent or broker can explain further. With cottage insurance, it’s particularly important to invest whatever time it takes to be certain that you understand the policy’s limits before you agree to coverage. Remember to include outbuildings, fences, and so on when calculating the coverage you need.

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