Does condo insurance cover damage to other units?

If you own and live in a condo, it's important to have some home insurance, and that's where condo insurance comes in. Condo insurance is a special type of property insurance designed for condo owners to protect themselves and their personal belongings, but does it also cover damage to a neighbour’s unit if something goes wrong, like a fire or flooding? Let's find out.

Is damage to other units covered by condo insurance?

Yes. Condo insurance doesn’t just protect your personal belongings and the inside of your unit—it also covers property damage to other units if something from your place causes a problem. It would fall under your personal liability coverage.

For example, if a fire starts in your condo and spreads to a neighbour’s unit, your insurance can help cover the costs.

Another example is if you accidentally leave your bathtub running and it overflows, leaking into the unit below. In this case, your condo insurance can help cover the cost of replacing the other unit owner's damaged belongings.

How much personal liability coverage should you have?

Personal liability is there to protect you from having to pay out large sums from your own pocket, which is why it’s common for condo owners to purchase higher coverage limits.

If you live in a smaller condo building, $1 million in liability coverage might be enough. But in larger buildings, where damages can add up fast, it’s often a good idea—or even a requirement from your condo corporation—to increase your coverage up to $2 million or more for extra protection.

Liability coverage is a key part of your condo insurance policy that gives you peace of mind, knowing you won’t have to face third-party costs like medical bills, repair costs, or legal fees if someone is injured in your condo unit or if something from your condo unit causes damage to other units.

What does condo insurance cover?

In Canada, condo insurance works alongside your condominium corporation’s insurance policy to make sure you’re fully covered. While the condo corporation’s insurance usually takes care of the building’s exterior and common areas, your personal policy is all about protecting the inside of your unit, plus your belongings, liability, and extra living expenses if something unexpected happens. Policies can vary, but here’s a general breakdown of what a standard condo insurance policy typically includes:

Dwelling coverage

Dwelling coverage protects the interior of your condo, including the walls, floors, ceilings, and any unit improvements or upgrades you’ve made, like a renovated kitchen or bathroom. If something happens and these structural elements are damaged due to a covered risk, this coverage helps pay for repairs or rebuilding. Covered risks for condos often include:

• Fire
• Lightning
• Smoke
• Vandalism
• Theft
• Explosions
• Falling objects
• Car or aircraft impact

Your condominium corporation’s insurance covers the condo building’s exterior and shared spaces, but dwelling coverage is all about protecting the interior of your unit—the part you actually own. For condo owners, this coverage is key because, unlike renters, you actually own the interior of your unit.

Contents coverage

Think about all the things that make your space yours—your TV, furniture, laptop, clothes, and even the little touches that make it feel like home. These aren’t just things; they’re part of your lifestyle and investments.

Contents insurance helps protect your personal property from risks like theft, fire, certain types of water damage, and vandalism. If something unexpected happens, it can help cover the cost of repairs or replacements, so you’re not stuck paying out of pocket to start over.

Condo living comes with unique risks since your space is connected to others. For example, if a neighbour’s pipe bursts and floods your unit, damaging your furniture and electronics, contents coverage can help cover the loss.

It's important to note that content(s) coverage has coverage limits, so if you own expensive items like high-end jewellery, musical instruments, or fine artwork, you may need to purchase additional coverage to ensure they're protected in the event of a claim.

It's also important to note that your condo corporation’s insurance policy may cover some fixtures in your unit, such as the original appliances, wiring, plumbing, and carpets, but not always. To make sure you get the right amount of insurance for your needs, check with your condo corporation to see exactly what their policy covers for your unit. That way, you’ll know what gaps you need to fill with your own coverage.

Personal liability coverage

Personal liability insurance is like a financial safety net, protecting you if someone gets hurt in your condo or if you accidentally damage someone else’s property. Imagine a guest slips on a wet floor in your unit and gets injured, or a leak from your condo causes damage to the unit below. Situations like these can lead to expensive medical bills or even a lawsuit, and that’s where liability coverage steps in.

This coverage helps pay for costs related to injuries that happen in your condo, as well as accidental damage you might cause to other parts of the building. It’s especially important in a condo setting, where what happens in your unit can easily impact your neighbours.

For example, if a fire starts in your condo and spreads to other units, personal liability coverage can help cover the damage. Without it, you could be on the hook for massive repair costs and legal fees. That's why personal liability coverage often starts with a $1 million policy limit with the option to increase it.

Additional living expenses coverage

This part of your condo insurance helps cover the cost of a temporary place to stay, like a hotel or rental, if your condo becomes temporarily unlivable. It also helps with extra expenses, like eating out if you don’t have a kitchen to cook in. Essentially, it makes sure that even if your home life is disrupted, you won’t have to stress about where you’ll stay or how you’ll manage daily essentials.

Why you need condo insurance even though your condo corporation has a policy

Your condo corporation’s insurance covers the building’s exterior and common areas—things like the lobby, hallways, and shared amenities. That means the roof, structure, and anything outside your individual unit are protected under their policy.

But here’s the catch—everything inside your unit is your responsibility. Your personal belongings, furniture, and sometimes even interior finishes like flooring and countertops aren’t covered by the condo corporation’s insurance. Plus, if someone gets hurt inside your unit or you accidentally cause damage to another unit or a common area, their policy won’t cover those costs either.

That’s where condo insurance comes in. Unlike regular homeowners insurance, condo insurance is designed specifically for condo owners, focusing on the inside of your unit and your belongings. It helps fill in the gaps left by the condo corporation’s policy, protecting you financially if something goes wrong.

Coverage options that can enhance your condo policy

A personal condo insurance policy covers many aspects of condo living, but there are other areas where additional coverage can help benefit condo owners. Here are a few options to consider:

Extended water damage coverage

Extended water damage coverage protects you from sudden and accidental water damage caused by things like sewer or septic backups, sump pump failures, or water entering your condo or storage locker from heavy rain, melting snow, or rising water levels. If something like this happens, this coverage can help pay for replacing and cleaning your belongings, repairing materials, and even covering extra living expenses if you need to stay elsewhere.

Standard condo insurance doesn't include water damage due to sewer backups or overland flooding. Water damage can be costly and stressful, so having extended water damage coverage ensures you’re protected from unexpected flooding disasters.

Equipment breakdown coverage

Equipment breakdown coverage gives you extra protection for the appliances and systems that keep your home running smoothly, like your fridge, washing machine, or air conditioner. If one of these suddenly stops working due to a mechanical failure or electrical issue, repairs or replacements can get expensive fast.

Standard condo insurance doesn’t cover these types of breakdowns since they’re considered regular wear and tear. But with equipment breakdown coverage, you’re protected from unexpected malfunctions. So if your fridge suddenly dies because of an electrical problem, this coverage can help with repair or replacement costs, saving you from an unexpected, expensive bill.

Loss assessment coverage

Even though you pay condo fees, if your condo building suffers major damage with costs that exceed its policy's limits, the condo corporation might charge every unit owner a loss assessment fee to help cover repair costs, deductibles, or other expenses.

For example, if a storm damages the roof or a shared space like the lobby, the repair costs might go beyond what the condo association’s insurance covers. When that happens, the extra expenses get split among all the condo owners.

This is where loss assessment coverage comes in. It helps cover your share of the fee, so you’re not stuck paying out of pocket. It’s an extra layer of protection that can save you from unexpected and expensive costs.

All perils insurance

Think of all perils as an umbrella that protects you from things like fire, theft, vandalism, and certain types of water damage—except for anything specifically excluded in your policy.

All perils insurance equals peace of mind. Instead of worrying about whether a certain incident is covered, you can feel confident knowing you’re protected from most unexpected events. That said, it’s always a good idea to read the fine print, since some exclusions may still apply. Understanding what’s included (and what’s not) ensures you’re fully covered when it matters most.

Umbrella insurance

For even more liability protection, you may want to consider purchasing a separate umbrella insurance policy. This kicks in once you’ve hit the limit of your condo’s liability coverage and helps cover big liability claims or legal judgments. It can even protect you if you’re sued for libel or slander, giving you an extra layer of financial security.

Is condo insurance mandatory in Canada?

In Canada, condo insurance isn’t legally required the way car insurance is, but that doesn’t mean you can go without it. In most cases, having a condo insurance policy is essential —whether it’s required by your lender, your condo corporation, or just for your own financial peace of mind. Condo insurance is necessary:

If you have a mortgage

Just like with home insurance, lenders typically require condo insurance to protect their investment. If something major happens—like a fire or water damage—insurance ensures the repairs don’t put your mortgage payments at risk.

Your condo corporation might require it

While the condo corporation’s insurance covers the building and common areas, it doesn’t protect the inside of your unit, your belongings, or your liability if someone gets hurt in your home. Many condo boards require owners to have personal condo insurance to fill these gaps.

It protects your financial security

Even if it’s not technically mandatory, having condo insurance is a smart move. It covers your personal property, interior upgrades, and potential liability costs, helping you avoid expensive out-of-pocket repairs or legal fees if something goes wrong.

Learn more with BrokerLink

If you’re wondering what else condo insurance does or does not cover, a condo insurance broker here at Brokerlink can help. Our brokers are experts in all things insurance. We can explain everything you need to know about condo insurance policies and help you determine the best coverage for your unique situation. We can even help you find other types of insurance for your needs, like auto insurance, business insurance, pet insurance, and more.

You can reach us by phone at 1-855-451-8748, by email, or in person at any one of our locations throughout Canada. No matter how you choose to get in touch, a BrokerLink insurance advisor will be happy to assist you. We also encourage you to take advantage of our free online quote tool that can provide you with a competitive quote in minutes.

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