How can you protect your condominium?

When you buy a condo, you become the owner of your individual unit as well as a share of the building’s common areas, such as the lobby, roof, grounds, and other shared spaces. That’s why two different types of insurance are involved: one that covers your unit and another that covers the building’s shared areas.

What Is Condo Owner’s Insurance?

This is the insurance policy that covers your personal belongings and your personal liability as a condo owner. It also protects any improvements or upgrades you’ve made to your unit after purchasing it, such as new cabinetry, upgraded countertops, or the installation of a heat pump.

What Is the Condominium Syndicate’s Insurance?

The condominium syndicate’s insurance protects the building itself, including the common areas and the original finishes and fixtures installed before any renovations or upgrades were made by owners (such as flooring, countertops, or cabinetry).

This policy also covers the civil liability of the condominium syndicate and its board members. In addition, the syndicate must maintain coverage against common risks such as fire and theft, with insurance limits sufficient to cover the full replacement cost of the building.

What Should You Do in the Event of a Loss?

Anything required to restore your condo to its original condition is generally covered by the condominium syndicate’s insurance. This may include rebuilding walls, replacing flooring, or restoring original countertops.

Your personal condo insurance, on the other hand, covers the replacement of your belongings, such as a stove, furniture, or electronics. It also covers the additional cost of any upgrades you’ve made to the original finishes. For example, if you replaced standard laminate countertops with granite, your personal insurance could cover the difference in value.

What’s New in Quebec?

Several legislative changes affecting divided co-ownership properties (condominiums) have been introduced in Quebec. These measures help clarify the respective responsibilities of condominium syndicates and unit owners.

Key changes include:

1. Mandatory Building Appraisals
   Condominium boards must obtain a professional appraisal of the building every five years. The amount of insurance carried under the syndicate’s master policy must reflect the building’s reconstruction cost.
2. Detailed Unit Description Register
   Condominium syndicates are now required to maintain a document describing all private units. This register must be detailed enough to identify improvements and upgrades made by individual owners.
3. Self-Insurance Fund Requirement
   Syndicates must establish and maintain a self-insurance fund to cover deductible expenses in the event of a claim. This reserve must be sufficient to cover the highest deductible under the syndicate’s insurance policy, excluding deductibles related to earthquakes or flooding.
4. Mandatory Directors’ and Officers’ Liability Insurance
   Liability insurance for condominium board members and administrators is now mandatory.

Understanding these different insurance responsibilities can help ensure that both your investment and your personal assets are properly protected.