A significant number of condo owners could face massive liability costs by simply not checking their building insurance policy.
Almost two-thirds of condo owners do not know or incorrectly assume their building’s insurance will cover damage to another unit from water or fire that originated in their unit, according to research from Allstate Insurance. If found personally liable, owners could potentially face huge financial loses.
“It’s just an assumption by most condo owners that their board insurance covers it al. It’s only when something arises, like a fire, that it comes to light and then it’s too late,” Brian Persaud from RE/MAX Realtron Realty told CREW.
Modern homes equipped with modern technology and oil-based products burn eight times faster than older properties, according to Windsor Fire and Rescue. Last weekend, over $20 million worth of damage was done following a fire in a condo construction building in South Edmonton.
Investors are also being warned to ensure their respective property management companies are forcing their tenants to have renters’ insurance upon lease renewal. “It does happen a lot, where condo owners believe their management company has taken care of it all in respect to checking renters’ insurance. They trust that it will be enforced, but it can often go unchecked.”
The Allstate research also found that a staggering 74 per cent of Canadians looking to purchase a condo in the next few years do not know what their personal insurance should cover versus what the condo corporation’s would cover.
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