Condo Insurance in BC: What Your Strata Covers and What You Need to Insure Yourself

This is general information, not a guarantee of coverage. Strata bylaws, strata policies and personal policies all differ, so confirm the details of your own situation with your strata corporation and an advisor.

Quick answer: your strata corporation insures the outside structure of the building and its common areas, not your belongings, and not your personal liability. The Financial Consumer Agency of Canada says condo insurance is different from home insurance: it covers damage or loss to the inside of your condo and your storage locker, while the condo corporation's policy covers the outside structure and common areas. In BC, the biggest surprise for many owners is the deductible on the strata's own policy, which an owner can be required to pay, according to the BC government.

Two policies, two jobs

A condo is covered by two separate layers, and each does a different job.

The strata corporation's policy covers the outside structure of the building and its common areas. It is held by the condo corporation, not by you. The BC government notes that it does not cover personal liability or household contents, among other things.

Your own condo policy covers the inside of your unit and your storage locker. This is the policy that responds to your belongings, your liability to others, and your costs if you cannot live in your home.

The Financial Consumer Agency of Canada's advice is short and worth following: review your condo insurance policy coverage and your condo corporation's insurance policy coverage together.

What the BC government says owners should insure

The Province of British Columbia lists three things strata owners should consider insuring themselves:

1.     Personal property, with the advice to have a general sense of what it would cost to replace your contents.

2.     Personal liability, meaning bodily injury or property damage unintentionally caused to others.

3.     Additional living expenses, meaning the cost of living elsewhere after an insured loss.

Those three line up with the coverage areas on Air1's Home Insurance page: personal belongings coverage, liability coverage, and additional living expenses, alongside property damage protection for the home itself. Air1's page says its homeowners policies are designed for people who own a house, a condominium, an apartment or a hobby farm.

The strata's insurance deductible, in plain terms

This is the part of condo ownership that surprises people most, so it is worth reading slowly.

When the strata corporation makes an insurance claim, its policy has a deductible. The BC government page says that owners may be required to pay the strata corporation's deductible, and that the deductible "can range from $100,000 to $750,000 or higher". It also says an owner can be deemed responsible and required to pay the deductible even if the owner was not at fault.

The page does not use the term "loss assessment", but it describes the same idea: additional owner coverage can help pay for special levies if the deductible or repair costs exceed the strata corporation's policy limits.

What this means for you in practice:

•        Find out your strata's current deductible. Ask your strata manager or council for the insurance summary.

•        Read your strata bylaws. They can affect when and how a deductible may be charged to an owner.

•        Ask your advisor about cover for deductible charges and special levies, and compare its limit with your strata's deductible.

Air1's Langley home guide gives the same checklist in one line: for condos and townhomes, review your personal policy alongside the strata corporation's master policy, and ask about unit improvements, contents, liability, loss assessment and cover for the strata's deductible.

Condo lines on Air1's home application

Air1's Home Insurance Application is the form an advisor works from. Its coverage table includes lines that apply specifically to condo owners. They are worth knowing by name, because they are the questions to ask:

•        Unit owners' building improvements and betterments. This is about the upgrades inside your unit, such as flooring, cabinetry or fixtures you have added. Ask who insures what, because it depends on your strata's policy and bylaws.

•        Loss assessment. This relates to your share of costs the strata charges owners after a loss, which may include a deductible.

•        Condominium contingent legal liability. This is a liability line specific to condominiums.

•        Bylaws endorsement. This ties to the idea above that strata bylaws can matter.

•        Sewer back-up and earthquake, both listed as optional lines on the form. Air1's Langley guide describes earthquake cover as optional in most policies and worth reviewing carefully in BC.

•        Replacement cost on contents, and rental income if you rent the unit out.

These are lines on a form, not a promise. Which ones are offered, what they cost, and their limits depend on the insurer and the policy, so ask your advisor to walk through each one for your unit.

Questions to ask your strata corporation

1.     What is our current insurance deductible, and how is it charged to owners?

2.     Do our bylaws allow a deductible to be charged to an owner, and under what conditions?

3.     What does the strata policy cover inside units, and what is left to owners?

4.     Has there been a recent claim or premium change that could lead to a special levy?

5.     Can we have a copy of the insurance certificate or summary?

Questions to ask your advisor

1.     What is the limit on cover for deductible charges and special levies, and does it match our strata's deductible?

2.     How are my unit improvements insured?

3.     What is my contents limit, and is it replacement cost?

4.     What liability limit am I getting?

5.     What happens if the unit is uninhabitable, and what are the additional living expense limits?

6.     Is earthquake or sewer back-up cover available, and how are those deductibles set?

7.     What would change if I rent the unit to someone?

Common condo insurance mistakes

•        Assuming the strata covers your belongings. The BC government says its policy does not cover household contents or personal liability.

•        Not knowing the strata's deductible. It is one number you can look up in minutes, and it can be very large.

•        Overlooking your own upgrades. If you have renovated the inside of your unit, ask who insures those improvements.

•        Skipping liability. Personal liability is one of the three items the BC government lists for owners to consider.

•        Letting the policy go stale. Air1's Langley guide lists renovations among the reasons to review coverage before renewal. A renovation, a new tenant or a change in how you use the unit are all good moments to review.

If you rent out your condo, or rent one

•        Landlords. Renting changes the risk, and your policy should say so. Air1's landlord insurance guide includes a section for condo landlords on strata exposure.

•        Tenants. The BC government notes that the strata corporation's insurance and the owner's insurance do not cover a tenant's needs, and that tenants can be held responsible for damage that they or their visitors cause. Air1's tenant insurance guide explains how tenant cover fits in.

What to have ready for a condo insurance quote

Air1's application asks about the unit and your history. Have these ready:

1.     The address and the type of building (for example, a high-rise)

2.     How you use the unit: your primary residence, a seasonal home or a rental

3.     An estimate of what your contents would cost to replace

4.     A list of upgrades you have made inside the unit

5.     Your strata's deductible and a copy of the insurance summary if you have it

6.     Claims in the past five years, and whether any insurer has declined, cancelled or refused to renew you

7.     Your current insurer and policy expiry date

8.     Any mortgage lender that needs to be named

FAQ

Does my strata insurance cover my belongings?

No. The BC government says strata corporation insurance does not cover personal liability or household contents, among other things. Your own condo policy covers the inside of your condo and your storage locker.

Do I need condo insurance in BC if my strata has insurance?

They do different jobs. The strata's policy covers the outside structure and common areas, and the owner's policy covers the unit's contents, liability and living expenses. The Financial Consumer Agency of Canada suggests reviewing both.

Can I be charged the strata's deductible?

Possibly. The BC government says owners may be required to pay the strata corporation's deductible and can be deemed responsible even if not at fault. Check your bylaws and ask your advisor about cover for deductible charges.

What is loss assessment on a condo policy?

It is generally cover for your share of costs the strata charges owners after a loss. The BC government describes related owner cover as helping to pay special levies if the deductible or repair costs exceed the strata's policy limits.

Does Air1 insure condominiums?

Air1's Home Insurance page says its policies are designed for people who own a house, condominium, apartment or hobby farm. Your advisor can explain what is available for your unit and strata.

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If you own a condo, you can look at Air1's home insurance options, fill in the Home Insurance Application (save the editable file to your computer first), or request a quote and go through your strata's deductible with an Air1 advisor.

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