Are you thinking about buying a condo? Condos are a popular housing type in pricey real estate markets like Toronto and Vancouver due to their relatively affordability compared to single family detached homes.
When buying a condo, many people assume that they don’t need home insurance. If anything were to happen, the condo has its own insurance and they should be fine. This is false. Even though the condo may have insurance that protects the common areas, you’ll still need to get insurance to protect your own condo unit.
Point2 Homes recently wrote an interesting article on condo insurance and what is and isn’t covered. Let’s look at some of the highlights of that article now.
What Does Condo Insurance Protect Against?
Condo insurance, otherwise known as HO-6, is a home insurance policy specifically for condos. It’s supposed to protect your condo unit and your stuff inside. It also helps cover any costs associated with repairs, living expenses in case you can’t live in your unit for an extended period of time and personal liability in case someone gets hurt on your property.
Although condo insurance isn’t required in most condo buildings, most mortgage lenders do require it as a condition of approval and with good reason. As mentioned, you’re leaving yourself open to financial ruin without it.
What Doesn’t Condo Insurance Protect Against?
Although condo insurance protects you from a lot of things, it doesn’t protect you from everything. There are some instances when condo insurance won’t be enough to protect you. Most condo insurance policies don’t cover floods, earthquakes and sinkholes.
With climate change, not being protecting for flooding can prove problematic. It’s a good idea to contact the National Flood Insurance Program if you’re concerned about flooding (i.e. you live in an area that commonly floods).
Are you snowbirds or do you regularly travel for extended periods of time on business? You’ll want to be aware that most condo insurance policies won’t protect you if you leave your condo unit vacant for 30 days in a row. If you’re concerned about that, you can ask someone to check in on your condo unit for you or you can get vacant condo insurance to protect you during this time.
Is your condo a rental property? Did you know that some condo insurance policies insure you against loss of rental income? Not all of them do though, so you’ll want to read the fine print before you sign up in case this is an important feature for you to have.
Speaking of rental properties, if your condo is a rental, you’ll want to look into getting landlord insurance. It’s also a good idea to ask your tenants to get renters’ insurance. That way their stuff will be protected in case anything were to happen.
Brought to you by Sean Cooper