Condominiums. Insurance Basics

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Eustacia Morgan
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1 Condominiums Insurance Basics

2 Condominiums in Canada 2001 Census reveals that condominium ownership continues to be a growing trend 2004 CMHC study predicts that condominium lifestyles will remain popular: Aging population Downsizing Secure environment Increasing non-family households

predicts that condominium lifestyles will remain popular: Aging

8 Condominium Terminology Condo Corporation Unit Owner Insurable Interest Bylaws Condominium Act

9 Condominiums Commercial Insurance

10 Commercial Insurance Exposures To Consider: Property Perils (Buildings & Contents) Liability: Premises/Common Areas (Bodily Injury & Property Damage) Directors & Officers: Fiduciary Responsibility in running the financial affairs of the Corporation. (Wrongful Acts)

Injury & Property Damage) Directors & Officers: Fiduciary

11 Commercial Insurance Condo Corporation What is to be covered? Regarding Buildings & Contents: Under the Condominium Act of Nova Scotia, Section 34 (Insurance) it states, The corp shall insure to repair the units and common elements by fire and such other risks.the corp has an insurable interest to the replacement value of the units and common elements. Condo Corp must consider the replacement cost/value of all units, in their original stock form, when determining replacement value of the Buildings of the corporation.

to repair the units and common elements by fire and such other risks.

12 Condominiums Personal Insurance

13 Personal Insurance Exposures for Unit Owners Personal belongings Loss of use Betterments and improvements Personal liability Corporation assessments

14 Personal Belongings Contents Includes furniture, clothing, appliances, personal items such as books, decorations, jewelry Always refer to the policy wording to determine if special limits apply!

books, decorations, jewelry Always refer to the

15 Betterments & Improvements Master policy for corporation will rebuild the unit as it was when originally sold (Stock) Personal insurance policy can provide coverage for the upgrades made by the unit holder Always refer to policy wording for specified limits!

insurance policy can provide coverage for the upgrades made by

16 Claim Settlements in Condominiums IBC Guiding Principal Insurance Bureau of Canada Bulletin According to the provincial department responsible for the Condominium Corporation Act in Nova Scotia, it is the intent of the Act for all condo corporations to insure all parts of the condominium building, including units, but excluding personal property of the unit owner and any betterment acquired by or made by the owners themselves.

intent of the Act for all condo corporations to insure all parts of the condominium building, including

17 Claim Settlements in Condominiums IBC Guiding Principal Continued... Insurance Bureau of Canada Bulletin (In reference to Subscribing Company/General Managers Bulletin No and All Members Bulletin No 88-10) Based on IBC Guiding Principal, IBC policy wordings, and the Condominium Corporation Act for the Province of Nova Scotia, the correct way to determine which policy responds to a loss is to first determine whether the item lost or damaged has been supplied by the Corporation as a stock item. If it was, the Corp policy will be responsible for the loss. If the item damaged was an improvement or betterment and replaced a stock item, the Corp s insurer pays up to the cost of the stock item and unit owner s policy pays the remainder. If damaged item was not an original stock item, it is covered entirely by unit owner s policy.

policy responds to a loss is to first determine whether the item lost or damaged has been supplied by the Corporation as a stock item. If it was, the Corp policy will be responsible for the loss.

18 Stock vs Betterment/Improvement

19 Stock vs Betterment/Improvement

20 Betterments and improvements may range from a very simple stock model to something very different...and costly.

21 Corporation Assessments/Gaps Unit Additional Protection Corporation Deductible Loss Assessment Property Loss Assessment Liability Loss of Use Always refer to policy wordings for specified limits!

22 Personal Insurance Determining Value value = full contents limit + betterments stock originals

25 Debris Removal Can Be Costly!

28 Thank You!

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