An insurance policy purchased by a unit owner to cover personal contents, improvements and betterments made to the unit, personal liability, and any deductible the condo corporation's master policy might pass on to individual owners. This is separate from the building's master insurance policy, which is paid through condo fees and covers the building structure, common elements, and standard unit finishes as defined in the declaration.
Why It Matters
Many condo owners mistakenly believe the building's master policy covers everything. It doesn't. If your unit floods and damages your hardwood floors, upgraded kitchen, or personal belongings, the master policy likely won't cover it. Even more concerning, many condo corporations now have large deductibles ($50,000 to $250,000+) that can be charged back to the unit where a claim originates. Your condo insurance needs to cover that gap.
Real-World Example
A pipe bursts in your unit on the 12th floor of a condo tower near Harbour and Bay in Toronto, flooding your hardwood floors, kitchen cabinets, and the two units below you. The building's master policy has a $100,000 deductible for water damage claims, and the by-laws state that the deductible is charged back to the unit where the damage originates. Your personal condo insurance policy with a $50,000 deductible coverage endorsement pays the corporation's deductible, covers your personal contents ($30,000 in damaged furniture and electronics), and covers the $15,000 in upgrades you made to the kitchen. Without your own condo insurance, you would be personally liable for over $145,000.
Ontario & GTA Context
Ontario's Condominium Act requires condo corporations to maintain a comprehensive master insurance policy covering the building structure, common elements, and standard unit finishes as defined in the declaration. However, many Ontario condo corporations have seen their insurance deductibles skyrocket in recent years -- from $25,000 to $100,000 or even $250,000 per claim. The corporation's by-laws typically allow the board to charge the deductible back to the unit owner responsible for a claim, making personal condo insurance with adequate deductible coverage essential.
How It Works in Practice
Get a condo insurance policy before you close on your purchase -- your lawyer will want proof of coverage. Make sure the policy includes personal contents coverage, improvements and betterments coverage for any upgrades you have made, liability coverage, and deductible assessment coverage matching or exceeding your corporation's deductible. Ask your insurer about the corporation's deductible amount and ensure your policy covers it.
Common Questions
How much does condo insurance cost in Toronto?▾
Is condo insurance mandatory in Ontario?▾
What is the difference between the condo master policy and my personal condo insurance?▾
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