A new rule has come into effect in Alberta for condo owners. One, that depending on their insurance coverage, they will have peace of mind knowing that their broker did their job at setting up their condo insurance or some may find themselves in financial ruins.
The new rule that was quietly passed through January 1st for condo owners is that they are responsible for the condo corporation's deductible for any losses that are caused by the condo owner. Condo owners could be on the hook to pay up to $50,000 which represents the condo corporations deductible that it needs to pay in case of a loss.
If you own a condo and you have a sewer back up, that is water escapes from your toilet and damages your condo, and the water goes through the wall and floor down to your neighbour’s unit, you would be responsible to repair your unit and the unit below yours. You will now be held responsible to pay for the condo corporation's deductible that they have with their insurance.
How this works is that the damage would be covered by your insurance and you would pay your chosen deductible for condo deductible protection . The damaged unit would be covered by your third-party liability. The damage to the condo would be normally covered by the condo board. However, now the deductible that the condo corporation had to pay is being passed along to the condo owner that caused the damage.
This deductible could be from $2500 up to $100,000. We have seen the deductibles increase over the last few years. The new legislation only makes the condo owner responsible for up to $50,000. For example, if the deductible was $25,000 the condo owner would need to pay $25,000. If the deductible was $100,000, they would only need to pay $50,000 and the condo board would need to pay the other $50,000. The condo owner shouldn't have to pay more than $50,000.
What can condo owners do to ensure they do not find themselves owing $50,000 for a deductible for a loss that they caused? Every condo owner needs to see if they have condo deductible protection on their policy.
You should ensure your policy has this protection. At Nuera Insurance we have this built into our condo policies. We offer this protection in $25,000, $50,000 and $75,000. Having a broker go over the options with you is very important as they are licensed and can recommend the proper coverage. When quoting on line with us. make sure you know your condo corporations deductible to ensure that you are well protected.