Condominium Insurance — be sure to cover your improvements

When you are looking to buy a condo, you’ll often see that the condo fees for a particular listing include building insurance. What that insurance covers will vary from complex to complex depending on what the condominium is responsible for, and what the unit owner is responsible for, but it always covers common elements.

If your condo is part of a condo building, you can expect that the condo’s insurance will cover its structural elements. But if your condo is completely detached, the insurance may or may not cover the structural elements of your unit like the roof — much depends on whether the roof (to use that example) is your responsibility or the condo corporation’s to maintain. Be sure to ask your lawyer what kind of insurance you need to get.

Where things get a little trickier are where the units are attached, either as apartment condos or rowhouses. The  insurance policy paid for by the condo corporation (via your fees) should cover the external elements like the roof, but again, you need to check. Even so, it’s up to you to insure the contents  (your furniture, computer, and other valuables) and to make sure you’ve got all the liability insurance you need as well.

But what about improvements? Unless a condo is brand-new, it’s probably been renovated and modified along the way.

Be sure to have your lawyer check the condo status certificate to find out what the original specifications were. (This is a document that should always be ordered by your lawyer and reviewed as a condition of purchase of your offer.) Among other things, it will reveal if there is a healthy amount of reserve funds, and what plans the condo board has for repairs and maintenance in the future. But it should also have a list of what the finishes and specifications were when your particular unit was built.

As your lawyer to tell you or show you on what pages these original specifications are in the status certificate (you should always be given a copy of the entire status certificate, but it can be hundreds of pages long)  so that you can pass them on to your insurer. If your unit had laminate floor or carpets when it was first built and the previous owner upgraded to hardwood, you will likely need to insure not just the contents of your unit but that improvement as well.

Same thing if you’ve decided to redo the kitchen and baths. The insurance company needs to know exactly what you’ve improved so be sure to call your agent once the renos are done. Yes, your premiums will be a little higher. But if you don’t insure your improvements, and there’s a fire or a flood, you may find that all you’re entitled to is the basic builder’s package of finishes that came with the unit.

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