Insurance tips for Strata Property owners
Excerpted from a Vancouver Island Strata Owners Association (VISOA) article by Barry Burko
Follow these tips to help determine the condo homeowner insurance you need when you own a strata unit.
1. Do the math for your contents
We often underestimate the value of our contents. For example, count the number of jeans and sweaters you’ve got and give each an average cost of $75 or more. Do the math and you’ll be absolutely astounded at the cost of your clothing alone! The cost to replace food and toiletries is another eye-opener. Also look at your electronic items including computers, phones, TVs, stereo systems, and don’t forget other devices such as Alexa or Google Assistant.
2. Don’t forget betterments
Any of the original fixtures that have been changed in your unit over the years, by you or a previous owner, are called betterments and are the owner’s responsibility to insure. These could be kitchen cabinets, countertops, flooring etc. Think of the cost to replace these. Most policies set the same value for replacement of your contents and your betterments, so select the higher of your two calculations and add on a bit more for good measure.
3. Make a video inventory
In the event of a total loss such as a fire, the insurance adjuster needs to justify to the underwriters what was lost or damaged. The best way to inventory all your possessions is to walk around your home, opening every closet and drawer, and video everything including your artwork, jewellery, collectibles, your storage area, bikes, tools and EV charger. Video all of your betterments as well. It’s incredibly simple to do with your smart phone. The video documentation will be enormously helpful when putting together your claim. Now store the video in the cloud so you can access it whenever you need it.
4. Protect yourself for water damage
Your policy typically includes several types of coverage related to damage from water. To the average person the names of those coverages are confusing. Water damage from burst pipes might be under broad form coverage. An overflowing bathtub could be covered under sewer back up. Overland water coverage isn’t just about flooding lower units – it could cover situations such as water entering a unit from the balcony during a rainstorm. You should also have coverage to pay a strata deductible charged back to you if you are found responsible for damage that gave rise to a claim on the strata’s policy. Your broker will likely warn you against denying any of these coverages.
5. Check the limit for living expenses
There’s a portion in every policy for additional living expenses if your unit is uninhabitable due to the extent of the loss. Remediation or construction can often take much longer than expected. You could find yourself in a position where the coverage for living expenses isn’t enough to cover the high cost of rent. And remember, you’re still making mortgage payments while you can’t live in your unit.
6. Get loss assessment coverage
This is one of the most important parts of your policy. If a claim is made on your strata corporation’s insurance policy and there’s a large deductible, a special levy can be passed so that each owner pays their portion of the strata’s deductible based on unit entitlement. There’s a provision in the Strata Property Act that permits the strata council to pass the special levy without going to the owners for approval. These levies can be large – in the tens of thousands. If you don’t have enough insurance, you’re putting yourself at risk. You could lose everything! Our strata corporation’s insurance policies are posted on the Insurance webpage; give a copy to your insurance broker. They can help you determine how much coverage you need.