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Strata Insurance

Have you ever wondered what type of insurance you require when purchasing a strata unit?
 
Q. Recently we bought a strata unit and we were advised to get liability insurance. We understand that there is strata insurance already in place that contains liability insurance and we are wondering why we should get our own as well?
- J & A
 
A. Hello J & A,
I have asked Terry McCarthy, CIP from Payne, Travis & Associates to explain strata insurance. Terry is a Chartered Insurance Professional with 15 years experience in handling strata building claims.

Individual strata unit owners are strongly encouraged to purchase their own Condo insurance coverage which covers their contents, any tenant improvements and additional living expenses. This should also include liability coverage.

Strata Building Insurance carries deductibles as do other types of insurance. They can be quite large, typically $5,000, but some are $25,000 or more. They often have different deductibles for water losses and other types of losses such as fires. Keep in mind that strata building insurance only covers common property.

The strata act protects unit owners and tenants from action in the event of their negligence causing damage to the building. The new act, however, stipulates that if owner is found “responsible” for a loss causing building damage, they can be charged for the amount of the building deductible only. Then their condo policy will respond to the building deductible. If the damage they cause is in excess of the building deductible, then the building insurer must cover the excess. We find owners are found “responsible” if the cause of the loss occurs in their unit, for instance a pipe in the unit bursting and causing building damage. As long as the by-laws of the strata note that unit owners must pay for the building deductible then the owners insurance will respond. The unit owner will still pay the deductible noted on their own policy which is usually $500.

Unit owners can still be held liable for their negligence if damage is caused to contents or tenant improvements of other unit owners. This is dealt with by their liability coverage.
 
To conclude, I suggest that you always read the strata documents and bylaws to verify what type of insurance the Strata carries and how it will effect you if there is a claim made against you. Also, consult an insurance provider to determine whether or not you need to purchase any additional insurance to protect yourself and your contents in the result of loss or damage.
 
If you have more questions regarding property insurance contact:
Terry McCarthy, CIP Payne, Travis & Associates
Phone: (604) 951-3011
terry.paynetravis@telus.net
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