Condo Insurance in Ontario

Is condo insurance mandatory in Ontario?

Home insurance in Ontario, whether that’s vacation home insurance, townhome insurance, or condo insurance, is not a legal requirement. In other words, unlike car insurance, the government of Ontario has not mandated that all property holders must purchase home insurance.

That said, as a homeowner, you might still be obligated to purchase home insurance if you have a mortgage on your home. For instance, if you took out a mortgage in order to fund your condo purchase, then your mortgage contract likely stipulates that you must have a valid condo insurance policy for the duration of the mortgage term. Signing this contract and refusing to purchase condo insurance or letting your policy expire before the contract is up would put you in breach of your contractual obligations and could lead to a cancelled mortgage or even a lawsuit.

In most cases, you will need to show proof of condo insurance to your mortgage lender before they will release the funds to you. Thus, in most cases, you will need to purchase condo insurance, even though it isn’t government-mandated.

The only situation in which you would not be under any obligation to purchase condo insurance in Ontario is if you bought your condo with cash or you paid off your mortgage. In this case, it is entirely up to you to decide whether you want to buy condo insurance or not. However, you won’t find many homeowners without a property insurance policy due to the level of protection it provides. After all, condo insurance covers fire damage, liability claims, and much more. Speak with an insurance brokers in Ontario for help purchasing the right condo insurance plan for your needs.

The biggest misconception about condo insurance in Ontario

The biggest misconception about condo insurance in Ontario is that your condo association’s insurance will cover damage to your individual condo unit. This is simply untrue, and yet many people think this is the case and use it as an excuse not to purchase condo insurance. Unfortunately, if you opt out of condo insurance for this reason, you will face a rude awakening should damage occur to your unit.

While your condo corporation or association likely has its own property insurance policy, it only provides coverage for damage to the building as a whole, such as to the building’s exterior or to common areas of the building. In other words, if any of the hallways, entryways, elevators, fitness room, or other amenities are damaged, the condo corporation’s insurance policy will likely pay for the necessary repairs, but that’s where the coverage ends. If your unit was damaged or a thief broke in and stole your personal belongings, the condo corporation’s insurance policy would not cover you. The same goes for guests who visit your unit and injure themselves.

The condo corporation’s property insurance policy likely contains liability coverage, which means it would cover third-party claims, but only if those claims arose from a tenant, resident, or another visitor who was specifically injured in a common area of the building. You will need your own condo insurance policy if you want to be protected against bodily harm and property damage claims that stem from an incident in your own condo unit.

Reach out to BrokerLink to learn more about the differences between condo insurance and your condo association’s insurance.

Your condo insurance policy can cover the following risks

The purpose of any condo insurance policy is to financially protect the policyholder in the event that their condo is damaged, whether that damage occurs due to water damage, theft, a fire, or a completely different type of risk. A few ways that your Ontario condo insurance policy can help if you face a worst-case scenario are as follows:

Your condo insurance policy can replace your personal items

One of the main benefits of a condo insurance policy is that it can pay to repair or replace the personal items inside your unit if they are lost or damaged. So long as the loss occurs as a result of a covered peril, such as fire, theft, or vandalism, you can file an insurance claim, and your provider will issue a payout that will help you replace the damaged items.

Your condo insurance policy might even cover damaged personal belongings that are temporarily being stored outside your condo unit or in a storage unit. When adding personal property coverage to your policy, ensure that you select a coverage amount that accurately reflects the combined value of the items inside your home. This is the only way to be covered in the event of a total loss.

Your condo insurance policy can pay for you to temporarily live elsewhere if your unit becomes uninhabitable

If your condo unit is damaged due to a covered peril and you are temporarily forced to relocate while it is being repaired, your condo insurance policy might cover your living expenses. If your policy contains a type of coverage known as loss of use coverage, you can be reimbursed for all kinds of living costs until your condo is fixed and ready. For example, loss of use coverage can pay for hotel expenses, food, meals, and clothing, toiletries, or other necessary personal items. It can even pay for any maintenance or condo fees that you owe during the time you are away.

Your condo insurance policy can pay for updates and renovations

You may not have realized, but if you add improvements and betterments coverage to your Ontario condo insurance policy, it can pay for changes you make to your condo unit.

Your condo insurance policy can pay for third-party liability claims

Any BrokerLink insurance broker will tell you that your condo insurance policy needs to contain third-party liability insurance. Why? Due to the protection it provides. Liability claims can be extremely expensive. All it takes is a guest slipping and falling in your unit to end up with a lawsuit on your hands. Third-party liability insurance for condos typically covers third-party claims of bodily injury or property damage.

Should a claim be brought against you, this type of coverage can pay for everything from medical expenses and damage repair bills to legal fees, including defence and settlement fees. Since liability claims can add up fast, most condo owners in Ontario choose to add $1,000,000 or $2,000,000 in third-party liability coverage to their policies.

Each type of Ontario condo insurance coverage explained

Now that you have an idea of the types of risks that Ontario condo insurance can protect you against let’s dive into the specific coverage types that are usually found in condo insurance plans.

Dwelling coverage

First up is dwelling coverage. Dwelling coverage aims to protect condo units against property damage caused by insured perils. Specifically, it protects your physical dwelling from damage, e.g. the walls, doors, and windows of your condo unit. So long as the damage stemmed from an insured peril, you can file a dwelling coverage claim for it. Insured perils vary between policies but typically include:

• Fire

• Lightning

• Smoke

• Theft

• Wind

• Car/aircraft impact

• Explosion

• Falling objects

Please note that for the broadest protection, you can choose to purchase all perils insurance.

Content(s) coverage

Contents coverage is a type of property damage insurance. However, unlike dwelling coverage that covers your physical condo unit, contents coverage covers the personal belongings inside your unit. So if your furniture, clothing, or electronics are damaged in a fire, you can file a content coverage claim, and your insurance provider will issue a payout to replace these damaged items. Please note that if your condo unit contains many high-value items, like musical instruments, fine jewellery, or original artwork, you may need to purchase a separate endorsement or rider for those items.

Personal liability coverage

Personal liability coverage, also known as third-party liability coverage, is another type of coverage that is typically part of every Ontario condo insurance policy. As mentioned, it can protect you if a third-party claim alleging bodily injury or property damage is brought against you. This type of claim could be filed if a guest injures themselves or their personal property is damaged while in your condo unit. Personal liability coverage can pay for all kinds of costs associated with this type of claim, such as medical expenses, repair bills, and legal fees.

Extra protection for your Ontario condo unit

Some additional coverage that might be worth exploring is listed below. Although these are not as common as the coverages listed above, they can be extremely worthwhile for certain policyholders.

Home business coverage

Home business coverage is a condo insurance add-on that protects policyholders against business-related damage. If you work from home on a regular basis or you operate a business out of your condo, then this type of coverage is a must. Basic condo insurance will not protect you against any losses that stem from your business, so you will need this type of endorsement if you want to be covered for both personal and business damage.

Home business coverage can protect you if a customer visits your condo and injures themselves while on the premises or if a thief steals work equipment or inventory from your home, as well as several other circumstances.

Equipment breakdown coverage

Equipment breakdown coverage will pay to repair or replace the household equipment in your condo if it fails due to an internal issue. For example, if your oven suffers a mechanical failure and stops working, you can file an insurance claim with your provider under the equipment breakdown coverage portion of your policy.

While terms and conditions vary between providers, this type of coverage usually protects a wide range of household equipment and appliances, including dishwashers, washing machines, dryers, ovens, refrigerators, air conditioners, furnaces, and more. Please note that only internal failures are covered, not general wear and tear that causes a unit to stop working.

Sewer backup coverage

Sewer backup coverage is a type of flooding coverage that can pay for the cost of repairing water damage to your condo that is caused by a sewer backup.

Overland water coverage

Overland water coverage is a second type of flood insurance that will cover the cost of water damage if your condo is flooded due to a nearby lake or river, overflow, heavy rain, or rapid snow melt.

How Ontario condo insurance premiums are calculated

When an Ontario insurance company is calculating your premium, they will assess your risk as a policyholder, as well as your condo’s risk level. To do this, they will consider the following factors:

• How valuable your Ontario condo is

• How safe and desirable your neighbourhood is

• How close your condo is located to emergency services

• The age of the building

• The construction of the building

• The type, age, and condition of the heating system that your Ontario condo uses (older systems like oil tanks or wood stoves may lead to higher premiums)

• The type, age, and condition of the electrical system in your Ontario condo

• The type, age, and condition of the plumbing system in your Ontario condo

• Whether your Ontario condo is equipped with a home security system, and if so, what type of system it has

• The coverages, limits, and deductibles you choose to add to your policy (you can find out more about premiums and deductibles here)

• Your insurance claims history

To find out how much an Ontario condo insurance policy will cost you, contact BrokerLink today. We offer free insurance quotes to all customers with no strings attached.

Tips to help Ontario condo owners find cheap insurance

It’s never been easier to save money on Ontario condo insurance than it is right now - especially if you have a licensed insurance broker by your side. Here at BrokerLink, we want your Ontario condo insurance policy to be as affordable as possible. That is why we offer all kinds of tips and advice to condo owners to help them reduce their premiums. Discover a few of BrokerLink’s top tips below.

Get rid of insurance coverage that no longer meets your needs

Condo insurance policies can change over time. The coverage you purchased or the deductibles and limits you settled on when you first bought your policy don’t need to remain the same the whole time you own your condo. In fact, you should likely update them as time goes on. Generally speaking, insurance experts recommend reviewing your policy each year before it is renewed.

This way, you can modify it if you see fit, such as by increasing or decreasing your deductibles or coverage limits or adding or removing types of coverage. Depending on how you adjust your policy, you might actually end up saving money on condo insurance. Speak with a BrokerLink insurance broker if you want them to review your policy and make a professional recommendation on how to amend it.

Install a burglar alarm system in your Ontario condo

Home security can make a big difference when it comes to your insurance premium. If you install a burglar alarm system in your Ontario condo, your insurance company may offer you a discount on your policy. This is because monitored alarm systems can reduce the chances of a break-in.

Bundle Ontario home and car insurance policies

If you also have car insurance, you may want to bundle your home and auto policies. Buying more than one insurance product from the same provider will be far more likely to result in a discount. In fact, you could end up saving on both policies by purchasing a bundle package.

Pick a high condo insurance deductible

Picking high condo insurance deductibles is another way that you can reduce your premium. Choose the highest deductible that you can reasonably afford in the event of a claim and notice that your premium may be lowered.

Do what you can to avoid a house fire

Taking the necessary precautions to avoid a house fire can reduce your odds of needing to file an insurance claim, which in turn, can keep your rates low. Key tips for practicing fire safety include installing a fire extinguisher in your condo, maintaining and replacing the batteries in your smoke detector when needed, never overcrowding electrical outlets, and never leaving open flames unattended.

We’re in your community

BrokerLink is the leading insurance brokerage in Ontario for a reason. We take a customer-first approach to insurance that allows us to offer personalized recommendations to each and every customer. We also give back to the Ontario communities we operate in. Learn more about our core values as a company and our dedication to corporate social responsibility by getting in touch today.

Get in touch with BrokerLink to find out more about condo insurance Ontario

At Ontario BrokerLink, we’re here to help you with any insurance needs you may have. Whether it’s insuring your home, car, business, recreational items, or pets, let us help you find the best coverage possible.

You can reach us by phone, email, or in person at any of our Ontario locations. 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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