Before you change your condo insurance policy or shop for a new one, you should find out more about the most complicated condo insurance claims. This will allow you to have a better conversation with your insurance company so you can get the best policy for your needs.
Going through the claims process can be a pain. Condo insurance is different from house insurance because both an individual condo insurance policy and commercial condo insurance policy can be involved in a claims process, which doesn’t make it easier. This gets even further complicated if you can’t live in your home while it’s being repaired.
We have identified the four worst-case scenarios for condo insurance claims. Learn what they are and how you can manage them:
1. Flooding caused by your neighbours
It’s always a challenge when a claim involves multiple parties. If your condo becomes flooded because of your upstairs neighbour is one such issue. Often you might not notice the issue right away (for example, you’re at work or away for the weekend). During this time, there’s a chance water may have damaged your contents, such as electronics and furniture or upgrades like hardwood flooring. Dealing with this type of claim isn’t easy since both the liability component of your neighbour’s policy and your contents insurance can play a role. Insurance companies won’t always quickly agree on who pays what. Now imagine that water leaked to multiple units, involving other parties’ policies as well. That’s when things can really get complicated!
2. Total loss and living expenses
In the case of a fire, earthquake, or other disaster that has the potential to render your home uninhabitable, you need to move into temporary housing. This type of claim has the potential to last between 12 and 24 months. Working with your insurer to agree on the value of your items and justifying your living costs can be a nightmare. Choose temporary accommodations that are modest and keep an updated photo log of the rooms in your home and your contents. This will make the claims process go smoother for both you and your insurer.
3. Roof/window/balcony door damages
Our home insurance brokers have shared several stories with us about the difficulty of condo claims. Since there are two policies in place (the commercial condo policy that covers the building envelope and common areas and your personal condo policy that covers your contents), two insurers must often work together to sort out who pays for damages. For example, a roof leak or a broken balcony door is covered by the commercial insurance policy but if that leak damaged your contents or broken balcony glass damaged your hardwood floors, you would claim that on your personal insurance policy. Be prepared for a few complications when making a condo insurance claim.
4. Wall pipe burst
Again, this is a scenario particular to condos. A burst pipe is always a nightmare but when it happens in a condo, both insurance parties come into play. Structural damage should be covered by the commercial condo insurance policy but you’ll likely have water and other damage inside your unit, which should be covered by your personal condo insurance policy. This particular issue often creates problems that can take a long time to solve.
Easy to settle claims
The claims process can take a long time when multiple parties are involved. However, some insurance claims, such as condo break-ins or theft from your locker are easy to settle and typically don’t take too much time to process. Again, having some evidence about items you have either in your condo or in your locker can help to accelerate the process.
While life if full of surprises, you can be better prepared by having the right insurance policy in place. This will greatly reduce the most expensive and stressful condo claim issues. Review your policy today and make sure you understand it, including the disclaimers.
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Flickr: Sam Xu