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Linda Palfi
CNC Properties
Box 47033 Creekside, Calgary, Alberta
P: 403-998-7732
F: 403-592-8002

Cheap insurance; the condo building is already insured


Condominium corporations in Alberta are required to insure the common property on behalf of all owners, saving them a bag of money on their personal insurance policies. While a house owner might face a $750 or $850 annual insurance bill, the condo homeowner will pay only one half or one third of that. The rest of the insurance expense is built into the monthly condo fees. Those who question the value of the condo owner's monthly contribution rarely notice this saving.


Although personal property and liability insurance is always recommended, and is usually required by condo bylaws, some condo owners don't carry their own policy. In the event of a major loss, they would still see their condo home entirely rebuilt by the condo corporate insurance, but would be out their furniture. Unlike an un-insured house owner, then, the condo owner enjoys a basic level of protection, regardless of what personal insurance she or he might carry; or not.


As with all insurance, of course, one should read the fine print. The condo corporate insurance on homes does not apply to bare-land condominium. If you buy a house built on bare-land condo property, you'll be buying full house insurance, just like any other owner of a single-family home. Yet your condominium corporation is required to carry insurance to the extent that there is common property, such as roads or recreation facilities, that are subject to loss and to insurance protection.


There are also varying levels of insurance carried by condominium apartment and townhouse corporations. While most policies will rebuild the homes right down to their interior finishing, at least one insurance broker in Alberta goes a step further. Their corporate policies also insure each owner's 'fridge, stove, dishwasher and laundry machines. This is a small point unless your own insurance carries a low personal-property rider of say, $10,000, which could be half spent on appliances before you get to replace your TV and your couch.


Beyond furniture, personal condo insurance is also necessary to protect the homeowner's liability. If it were your negligence that caused a major loss, the corporate policy would re-build the condominium homes, but might then sue you to recover its loss. A million or two in liability coverage feels pretty good when you're outside watching firefighters doing their job, and can't remember if you turned off the barbecue.


Returning to the condo corporate insurance, the most basic issue is the adequacy of the property value covered for reconstruction. Simply dividing the number of homes into the coverage amount will tell you how much is available to rebuild each home. When considering that figure's adequacy, remember that finished frame condo buildings are mostly sprinkler-protected, while concrete doesn't burn well at all. Foundations, parking garages, in-ground services and land value rarely suffer from fire, although flooding can undermine them.


On balance, the condominium corporate coverage should allow rebuilding of the condo homes, right down to carpeting and doorknobs, while a great policy will also replace appliances. That's part of the package of condominium living. The personal property insurance that we carry beyond that will be bargain-priced additional security.

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