Bought a Condo? The Difference Between Strata Insurance and Personal Condo Insurance

Two policies, each covering its own part

Many people assume after buying a condo that “the building already has insurance, so I don’t need my own.” That’s a common misconception. There are actually two different policies:

• Strata insurance (the whole building’s policy): bought by the strata (the owners’ corporation) with everyone’s strata fees, mainly covering the building structure, common areas, exterior walls and roof.
• Personal condo insurance (your own policy): covers the inside of your unit and your personal portion.

What personal condo insurance actually covers

Typically it includes:

• Interior improvements & betterments: flooring, cabinets, countertops you upgraded at your own cost, which strata usually doesn’t cover;
• Personal belongings: furniture, appliances, clothing, valuables;
• Third-party liability: e.g. a leak from your unit damaging the one below, or someone injured in your home;
• Additional living expenses: temporary accommodation while your home is uninhabitable after a covered event;
• Strata deductible assessment (loss assessment / deductible coverage): see below.

The exact scope and limits of each coverage are governed by the policy wording and need to be verified.

The most overlooked part: the high strata deductible

Strata policies often carry a very high deductible. If a claim is determined to originate from your unit (say a burst pipe in your home flooding several floors), that high deductible may, under the rules, be assessed to you — and the amount can be large.

Personal condo insurance usually has coverage for this portion. Whether it’s covered, and how much, depends on your policy and the strata’s specific rules, and needs to be verified. This is exactly why personal condo insurance really isn’t something to skip.

Sort this out before you buy

1. Get a Certificate of Insurance from the strata and check how high its deductible is and what it covers;
2. Based on where the strata coverage ends, decide what your personal policy needs to fill in;
3. If you rent the condo out, the situation is different — see The difference between landlord insurance and owner-occupied home insurance.

How I can help

Send me your strata Certificate of Insurance and I’ll review its deductible and coverage boundaries, then set you up with a personal condo policy that fills the gaps exactly — without paying for what you don’t need.