Insure your condo liability

Because condominium corporations already insure the entire property against all risks, some condo homeowners don't bother to buy their own home insurance policy. But while it's true that your condo building would be rebuilt by the corporate coverage if there were a fire, you need your own insurance to cover the possibility that it was you or your guest who caused that fire.

It's that simple. Coverage for your couch and TV is small potatoes compared to the liability you have if you or your guest flicked the cigarette butt or did whatever else that caused the loss to other homeowners and the condominium property. Imagine the scenario: Your building is damaged by fire, but is rebuilt in record time. You move back in, very impressed by the speed of the condo corporation's work. You hear a knock at the door, and there stands your condominium Board Chair with his hand out, and he says, "That'll be $2 million, please."

I don't mean to be flippant, but want readers to remember an image that will motivate them to buy homeowner's insurance. When you do you'll likely have $1 million or $2 million coverage for liability like that illustrated above, and your own contents coverage is tossed in virtually for free as an afterthought, because it's a relatively small risk and small-value number. But you'll also have some further coverage that didn't occur to you:

* Money to compensate a person who was injured (or even killed?) in the fire or incident that you or your guest might have caused.
* Interim accommodation and out-of-pocket expenses covered while your home is rebuilt.
* Defence costs covered in event there's a dispute over who was liable for the damage.
* "Trip and fall" coverage for the visitor to your suite who injures himself tripping on your area rug.

If you're still not convinced that you'll ever cause an incident worth buying insurance to cover, consider less dramatic risks you've never thought of. Just one example is water damage from an overflowed kitchen sink or leaky bathtub overflow drain. When was the last time you checked your tub's overflow drain gasket? I could name a dozen other sources for damage that most homeowners never imagine.

Condo insurance to cover all these risks is inexpensive. Unlike the house owner who must cover all risks, your condo corporation already has a policy paid for by your condo fees. You only need to cover your liability and contents at a cost of $200 or $300. Don't move in without it, and don't cancel it until the buyer from you has taken possession and you have his money.