• FIRST AND FOREMOST: Condominium corporations all should have and provide our clients with a copy of the Corporation by-laws (often referred to as declarations). These are vital in determining who owns what, who pays for what, etc. There have been extreme cases where the by-laws state that the condo corporation is responsible for only the cement walls, etc. and all else is the responsibility of the unit owner. Advise your clients to secure a copy, review and to call me/us if they have any questions.
• PERSONAL PROPERTY: Important to remember when writing these that a multi-level condo or townhouse will likely have more contents than the typical apartment style model. Keep that in mind with respect to limits. Most insureds have no idea the amount of property they have accumulated and will under estimate the value of their contents…until they have a claim that is!
• IMPROVEMENTS TO YOUR UNIT: Carriers have different ways of determining limits. e.g. Dominion allows up to 100% of the amount of the limit of insurance (on top of your contents limit) while Economical shows the amount payable on the declaration page. If your unit comes standard with $20 per square yard carpet, and you upgrade to $25 per square yard (either at time of purchase or after) then your policy responds for the difference. In cases where the unit owner is not the original, it is important that they ascertain any upgrades done, the approximate cost etc. so there are no nasty surprises in the event of a claim.
• LOSS ASSESSMENTS: If a loss occurs that exceeds the corporation’s limits of insurance, then the corporation can make a special assessment against all of the unit owners to make up the shortfall. Providing the assessment is valid under the Condominium Corporation’s governing rules, and is made necessary by a direct loss to the condo property caused by an insured peril in the policy, then most policies will respond, depending on how the limit is determined.
• CONTINGENT INSURANCE: If the corporation has no insurance, inadequate insurance or not effective
insurance with respect to damage to your unit that should
have been part of the Corporation’s responsibility as laid out in the by-laws, then unit coverage will respond up certain limits as per the policy with the exception of any assessment due to a deductible in the Corporation policy.
• LIABILITY: Most corporations have written into their
by-laws a provision prohibiting one unit owner from
commencing legal action against another and as well, the Corporation. This would apply with respect to negligence causing damge to another unit and the common areas. For example, fire damage caused as a result of negligence on the part of one unit owner cannot be subrogated by their carrier etc. However, generally bodily injury (I fall on your wet floor and sustain injury) can be litigated.
• ADDITIONAL LIVING EXPENSES: Condo policies provide coverage for additional expenses that become
necessary as a result of an insured peril. For example, restaurant charges are paid after normal grocery expenses are deducted. It is important to explain this to our clients as they often assume there is no deduction for existing
expenses. Another example: phone service – we pay hotel phone charges but if your bell line is cut off (extended period of repairs) then that monthly amount is deducted. However we will pay re-connect fees.