Why do I need insurance?
When you own a rental property you should have insurance coverage for your property. If your property is within a Strata Corporation there are multiple insurance policies which could be utilized in protecting the property.
When you rent out your condo or townhouse in British Columbia there should be three insurance policies engaged on the property. The three policies are, the Strata Corporation’s insurance policy, the homeowners policy and the tenants policy. What’s the difference for these types of insurance?.
The tenant policy is often referred to as contents insurance as it mostly covers the contents tenants have within the rental unit. Tenants insurance can include many other features including the option of relocating a tenant and their belongings while repairs are being completed after an event at the property.
The home owners insurance policy covers the requirements for repairing the strata lot. The Strata Corporations insurance policy covers requirements to repair common property.
Many strata lot owners misunderstand the need for insurance for their property, believing the strata has insurance.
The Strata Corporation is responsible for repairing common property and insuring the original fixtures within the strata lot. Insuring and repairing are two different situations which clouds the issue of when a Strata Corporations policy is engaged to repair a strata lot. Inside the unit is not common property, it belongs to the owner of the unit which makes the homeowner responsible for repairing and maintaining their strata lot.
The simple explanation for this is any repairs below the Strata Corporation deductible amount are the owner’s responsibility to repair. How this works is, if your strata has a deductible for water damage of $25,000 and there is water damage to your unit in the amount of $20,000, the homeowner must pay for those repairs. The Strata insurance policy will only be engaged when the damage exceeds the $25,000, as that is the insurable limit.
A homeowner could then engage their insurance policy, pay a deductible to have the $20,000 in damages repaired. The homeowner can also choose to repair the damage without engaging their insurance policy.
We can’t emphasize enough the importance of having proper insurance to protect your investment. Each Strata Corporation will have a declaration page outlining the deductibles for their policy, providing this to your insurer will assist you in acquiring the correct coverage needed. Having insurance and never needing to use it, is the best case scenario. Not having insurance and needing it is an adventure you want to avoid. We aren’t insurance providers and recommend you seek professional advice when it comes to obtaining insurance for your investment
Cartref Properties specializes in managing rental units located within Strata Corporations.
Need assistance with your rental property contact us for an evaluation of your needs.
www.cartrefproperties.com
