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Oftentimes, in the case of a water leak, it may be hard to determine who is specifically at fault. The condo corporations insurance will often step in and pay for the flood damages. However, this insurance will only cover repairing the condo unit up a “standard unit”, and if a condo owner has made upgrades to their unit such as replacing flooring and countertops or adding new appliances, they will need to cover those costs on their own. This is one of the reasons that it is highly recommended that condo owners to have their own insurance for their specific personal belongings, and to cover these additional improvements they may have made to their unit.

Even more important is the fact that a condo owner can be held liable if they have been negligent and caused damages to the condo building, in which case the condo corporations insurance may hold the unit owner responsible. This is where having unit owner liability insurance is critical.

For example, if a condo owner is reasonably unaware of a problem that caused a toilet leak which resulted in damage, they would not be held personally liable, and the condo corporation insurance would be responsible. However, it is the condo owner’s responsibility to maintain his or her unit, and if the damage occurs as a result of their negligence or lack of maintenance, the unit owners tenant insurance would be responsible for the claim, and that unit owner would be required to pay the deductible.

It is common that the unit owner would need to pay for their deductible even if they did not cause any of the damage that occurred to their unit, however sometimes their tenant insurance policy will then try to subrogate or legally pursue a third party that caused the loss, and if they are successfully, they will often refund or not charge the deductible.

To summarize, you can see that in many cases, it is often a combination of both the condo corporation insurance and owners insurance that ultimately work together to cover the loss.

by Dani Schulz, Property Manager