Condo association: How to select the insurance you need

What is your role as a condo director?

Your role is very important for ensuring that various aspects of the condo run smoothly such as:

• Receiving condo fees
• Verifying that there is enough money in the contingency fund to cover shared costs for work over a period of 30 years, whether anticipated or not
• Maintaining common portions such as the pool, parking area or deck
• Managing condo insurance that is right for the building

This is why you’re indispensable!

Why should you take out condo insurance for the common portions?

As a condo association director, you must take out insurance for the exterior of the building (the common portion). Normally, this insurance covers damage to common property caused by fire, water or vandalism. Damage caused by a storm or natural catastrophe, such as a tornado or freezing rain, can also be included in your coverage. The insurance also covers common property such as a pool or garage. Always check what coverage is optimal for your building. Civil liability is also included in the event of financial errors made in the course of your duties.

How do you choose the right condo insurance?

It can be difficult to make the right insurance choices. The basic principle is simple: The more coverage you take out, the higher the premiums will be. Therefore, choose the insurance company that offers the most coverage at the best price. Ensure that you select a contract that is appropriate for the building and its installations. For example, if there is no pool or common deck, you don't need to take out coverage for these installations.

What documents do you need to provide to the insurance company?

The insurer may ask you to provide various documents to assess what coverage you need for your building, such as:

• Photographs
• A recent inspection report
• A recent appraisal report (between 3 and 5 years), including the cost of rebuilding
• A clear description of private portions
• A list of regulations for common areas
• A list of the measures taken to prevent water damage, fires, etc.

With this information, the insurance company can assess what coverage and what amounts you need in the event of damage.

What types of water damage is the condo covered for?

You should be vigilant about what type of water damage coverage you are offered. This coverage might be limited with regard to the sources of the water damage. For instance, check if the policy covers damage caused by sewer backups. Some contracts cover only damage caused by overflow of water from eavestroughs, water seepage through the roof or breakdown of a household appliance. Additional coverage can be added to protect the building from pool overflows or a local flood.

How can you avoid having to file a condo insurance claim?

Damage to the building can happen in a flash. But an ounce of prevention is worth a pound of cure! Fortunately, you can do regular maintenance of the building to prevent problems. Here’s a few tips:

• Remember to clean out the eavestroughs in the fall and spring.
• Replace water heaters, smoke detectors and fire extinguishers, as required. Find out from your municipality or the province about how often this equipment needs to be updated.
• Clean drains, non-return valves and other drainage systems.
• If applicable, have the chimneys swept once a year.
• In winter, clear snow off the roof to avoid damage to shingles.
• If the roof is older than 20 years, have it inspected to ensure it is in good condition.

What do you do in the event of a loss?

If damage occurs, don’t panic! We’re there to find appropriate solutions and take action in the event of a loss. Contact the condo owners who are directly affected by the event and explain the situation. Let your neighbours know what is covered by their condo coverage.