Co‑owner condominium (condo) insurance
You have just gotten the keys to your brand new condo and you are now realizing that these insurance matters are a bit more complicated than you thought. You are right in the sense that insuring a condo is not like insuring a single dwelling home.
This administrative formula is currently the most popular one in Quebec. When you own this type of property, you not only own your personal apartment, but also a portion of the building’s common areas such as the parking lot, the corridor and the basement.
With this administrative formula, you own your personal apartment and part of the building itself, i.e. a portion of the total realty asset, and you share this asset’s management costs with your fellow co‑owners, i.e. the co‑owner syndicate.
How do I insure the co‑owner syndicate?
Must I insure the whole building?
As a condo owner, you don’t have to insure the whole building. That is the co‑owners’ syndicate and administrators’ responsibility, and they must do so by subscribing to a specialized condominium insurance plan. You will, however, obviously end up paying part of this insurance bill through your monthly condominium fees. As a co‑owner, you must insure your personal belongings, any leasehold improvements you make to the property and subscribe to a third party liability insurance.
A leasehold improvement is any type of improvement made to the unit that adds on to the property’s initial value. For example, if the condo’s original flooring was carpeting and you replace it by hardwood floors, your unit’s value will be increased, and any damage to the floors will be covered by your personal home insurance rather than by the co‑owners’ syndicate insurance.
Real estate property
You are wondering why you must insure a portion of the building since the co‑owner syndicate has already insured the whole building? The answer is that you might have to assume part of the responsibility if the common insurance plan cannot cover a loss. If you are one of your building’s administrators, we suggest that you have your building appraised by a certified appraiser as you are required, under Article 1073 of Quebec’s Civil Code, to subscribe to a full replacement cost insurance plan for condominiums.
You will have to insure your personal property in the same way as if you were a tenant of the building. We recommend that you carefully evaluate the value of your furnishings and personal belongings. You will be surprised by your assets’ total value! Remember that you must have full replacement cost coverage for your personal property.
As with any home or tenant insurance, you may also choose to add various riders to your contract in order to better reflect your situation. For more information, contact one of Assurances Multi-Risques’ brokers.