|An explanation on the difference
between an individual condo owners policy and a strata corporation
This article is courtesy of Wilson
M. Beck Insurance Services Inc.
The CONDOMINIUM ACT is applicable those coverages
that pertain to the strata itself being insured, not the specific
property owned by each condo owner.
The standard coverage that is usually arranged
includes the Building, Glass, Boiler and Machinery. Third Party
Liability and Officers Liability. Each strata corporation has the
right to make modifications the unit owner should determine what
coverage is being carried by the Strata Corporation.
The Condominium Act is specific in what the Strata
Corporation is responsible for, ie, common areas as defined, common
area glass, fire and acts of God, with respect to glass in
individual units. If the Strata Corporation wishes to make
amendments they must make amendments to the bylaws and have them
passed at the AGM (Annual General Meeting).
Under the standard strata insurance, the value of
any permanent fixtures are part of the building coverage. If,
however, the individual owner decides to replace any of the fixtures
with something else (ie, new cupboards, new carpet), these items are
no longer covered by the strata building coverage. They are
considered to be personal unit improvements and betterments and must
be insured under the condominium owners own personal insurance
coverage along with their personal belongings.
If one purchases a previously owned unit which had
major changes done by the previous owner, these changes would not be
a part of the strata corporation building coverage. In other words,
the second [and subsequent] purchaser should find out if the first
owner made any changes to the original unit furnishings put in when
the building was constructed.
Strata Corporation Liability
The liability coverage by the strata corporation
is to only insure exposures applicable to the corporation. As an
example, if a third party trips on the lobby entrance or parking
area, breaking a leg, the responsibility lies with the strata
corporation. If the same person, however, trips on the carpet inside
a suite, the responsibility lies with the specific condo owner, not
the strata corporation.
For all of the above reasons, it is necessary for
condo owners to purchase their own policy in in order to be
adequately protected in the event on an insured loss.
What Does A Condominium Owners Personal Policy
Provide Coverages For? The basic policy provides the following
- Personal belongings.
- Unit Improvements & Betterments.
- Unit Assessment and Unit Contingent Coverage.
||Unit Assessment: Covers
individual owners share of an assessment against all
unit owners in condominium; but only as a result of
an insured loss.
||Unit Contingent: If the Strata
Corporation carries no insurance or inadequate
insurance, this coverage will pick up the additional
cost to the individuals unit.
- Personal Liability Insurance
- Optional Coverage - Can be purchased to cover
jewelry, cameras, boats, etc.
The condominium owner should place coverage
through a qualified insurance broker after reviewing what is
necessary to adequately protect his/her assets and third party