Condominium Insurance in Ontario - Before buying you need to know this. by Dave Melanson

In Ontario, special acts have been enacted for Condominium Corporations. The acts form a specific outline and provide a complete definition of what a condominium is.
The Condominium Corporation is formed usually by a portion of the condominium unit owners and they are known as the directors and officers of the corporation. It is their duty to ensure that all parts of the building conform to the act and that all unit owners abide to such an act.
The definition from Black's Law Dictionary defines condominium as the following:
"a system of separate ownrship of individual units in (a) multiple unit building."
The common elements are a financial interest to each unit owner, they are part of the corporations responsibility, however, if the Corporation were to fall short on a claim, the unit owner would be liable for a shared assessment of their responsibility, the amount would depend on their percentage of ownership. For example, if there were 10 units, each owner would be responsible for one tenth of the assessment. Common elements that are shared by unit owners which are parking areas, landscaping and recreational areas. This is why individuals should buy a condominium policy package in order to protect their contents insurance and personal liability insurance, but a condominium insurance policy will also ensure they have coverage for the common elements if need be.
The formula to insuring a condo policy would be to know the value of the entire building and divide it by the number of owners and then assess the amount of coverage you would need on an individual basis.
Unit owners are sometimes under the impression that their Condominium is insured under the corporation which is correct, but, they only extend coverage for original carpet, wall paneling, and other original fixtures.
The unit owner is responsible for any upgrades to the original walls, carpet, and fixtures inside, which are known as condominium unit upgrades. Condo owners need to purchase their own condo insurance policy to ensure that there are no gaps of condo insurance coverage. It is recommended after uying their first policy that they review their condo renewal. The reason for this is sometimes, builders add to the units which increases value in addition to real estate increases.
There are two types of Condominium insurance policies. There is a comprehensive condo policy that normally covers you for all risks and the important part is to examine the exclusions in the policy. The second type is a Named Perils condominium policy and this will cover you for what is named in the policy, the named perils only.
The additional coverages you need to pay close attention to is the following:
U1-Condo Unit Improvements and Betterments:
Any improvements to the inside of the unit are not recoverable under the Condominium Corporations business policy. Therefore if you are buying a unit,make sure you know the value of the upgrades in order to decide on the amount of coverage you require.
U2- Condo Loss Assessment:
If coverage on the Corporations policy is inadequate to cover a loss to collectively owned property, a special assessment may be levied against each unit owner. For example, the loss may be for $100,000 and there are 10 units, each owners responsibility is $10,000. The corporation may have what is called a co-insurance clause in their policy and only recover $50,000 of their loss. They would then levy each unit owner $5000 to cover the difference incurred.
U3- Unit Additional Protection:
Essentially this coverage is to protect the unit owner in the event that the condominium corporation has inadequate coverage, has no insurance, or it is not effective.
Normally a standard limit of 2.5 times the limit of insurance is purchased for personal property.
Finally ensure that who ever provides you a condominium policy is offering you replacement cost on your contents, unit improvements as well as unit additional protection.

About the Author
Dave Melanson is the author of http://www.carandhome.ca and has been working in the insurance industry for more than 14 years as an agent and a broker. Dave's areas of expertise include: auto, home, boat, motorcycle and commercial insurance. Dave has consulted for Canada's top consumer insurance advocate and has been interviewed on insurance related topics with CBC news and the A Channel News.