Condo insurance

Where the boundary usually sits

Master policies broadly fall into two shapes, and the difference between them is considerable.

A bare walls arrangement covers the structure and the common areas and stops at the unfinished surfaces, leaving the owner to insure everything inward — fixtures, cabinetry, flooring, wall and ceiling finishes.

An all-in or single entity arrangement extends to the fixtures and finishes as originally built, leaving the owner to insure their own improvements and contents. The same unit needs quite different cover depending on which applies.

What the unit policy does

Whatever the boundary, the owner's policy generally handles the same set of things beyond the building itself.

• Interior structure inward of the boundary, including improvements and betterments you or a previous owner made
• Personal property, subject to the same category sub-limits as any home policy
• Personal liability, for injury or damage you are responsible for
• Loss of use, if the unit becomes uninhabitable
• Loss assessment, for your share of a cost the association charges to owners

Loss assessment, and why it matters

If a loss affecting the common property exceeds what the master policy pays, or falls inside its deductible, the association can charge the shortfall across the owners as an assessment.

Loss assessment cover responds to your share of that. It is easy to overlook because it insures against a bill rather than against damage, and the bill can arrive from an event that never touched your unit.

Master policy deductibles can be substantial, and where the association allocates one to owners this is the cover that responds. It is worth checking the amount carried rather than assuming the default is enough.

Read the documents before the policy

The association's declaration and bylaws define the boundary, and the master policy's certificate states what it insures and what its deductible is. Those two documents determine what your policy needs to do.

Ask specifically: is the master policy bare walls or all-in, what is its deductible, and can that deductible be assessed to owners. Those three answers shape the unit policy more than anything an insurer will ask you.

Both can change. Associations revise documents and renegotiate cover, and a unit policy bought against the old arrangement can quietly stop matching.

When damage crosses units

Water travelling from one unit into another is the most common condo claim and the most common source of dispute, because it involves at least three policies and a set of documents.

Your own policy generally responds to your damage regardless of where the water started, which is the practical reason to hold one rather than to argue about responsibility first.

Whether your insurer then recovers from a neighbour or the association is their process rather than yours. Liability cover on your policy is what responds if the water started with you.