How Does Insurance Work After a Condo Fire?

A growing number of Canadians are living in condominiums. As one of the only affordable options for home ownership in major cities across the country, there are now 1.6 million Canadian families or individuals dwelling in condos. The majority (1.1 million) own those condos as opposed to renting them.

With more Canadians living in condos now than ever before, it means that condominium fires are on the rise. Canadians living in a condo building are susceptible to home fires that not only start in their own unit, but also those that may begin in a neighbouring unit or common area and spread. For example, balconies are a common source of fires in high-rise condo towers, often caused by still-lit cigarettes thrown over the edge and being blown back onto a lower balcony, igniting cushions on balcony furniture or landing in a planter and igniting the potting soil or dried plants.

Navigating an insurance claim after a condo fire can be confusing, and there are a few important differences between a condo insurance claim and a homeowner insurance claim. Condo dwellers are often left wondering who pays for the repairs and recovery after a fire in the building, as it may not be as clear as it would be in a single house residential fire.

With a typical home insurance policy, there are three main types of coverage: Contents, Additional Living Expenses (ALEs), and Structure. However, when it comes to condominium insurance, you should have coverage for Contents and Additional Living Expenses, but the Structural coverage will more than likely be provided by the Condo Corporation or board.

Structure / Dwelling Insurance in Condo Buildings

Structure / Dwelling insurance covers repairs to the actual building – this category of coverage pays for the permits, contractors, building materials, etc. In a condo building, Structure / Dwelling insurance is typically acquired by the Condo Corporation or board, as it will cover both private condo units and common areas such as hallways, stairways, elevators, and amenities like rooftop patios, swimming pools, and gyms.

Note that repairing or rebuilding a multi-unit building will be inevitably more complex and time-consuming than repairing or rebuilding a single family house. In addition to the fundamental increase in complexity, a condo unit owner will also have less control over the process than a homeowner in a standalone house. This is because the structural insurance company will have been hired by the condo corporation or the board, and will work with their guidance first.

Contents Insurance After a Condo Fire

Contents insurance will help you replace the personal belongings lost in the fire. This category of coverage will pay towards replacing things like your TV, laptop, furniture, media (records, books, DVDs, etc.), clothing, linens, artwork, and even dry and frozen food spoiled by smoke or prolonged power outages after the fire. Condominium owners/dwellers are generally responsible for purchasing and managing their own contents insurance, though the condo corporation or board may have suggestions as to the amount of coverage you should acquire.

You can find further information on our resource pages if you want to learn more about content insurance and how to deal with insurance adjusters.

Loss of Use Insurance After a Condo Fire

Also known as Additional Living Expense insurance, this is an important part of any homeowner’s insurance policy whether in a house or a condominium. Loss of Use Insurance helps you cover the new and increased everyday living expenses when you cannot use your home and have to vacate after a fire. Loss of Use insurance covers expenses such as:

• Short and long-term rentals for temporary accommodations while you cannot live in your condo;
• Food costs above what you would ordinarily spend;
• Travel costs beyond your usual expenditure; and
• Storage and moving costs.

After a condo fire, find out what your limit is under the Loss of Use / Additional Living Expense category of your policy. As mentioned above, multi-unit buildings (especially high-rises) come with complicated repair requirements after a fire, and the time you may have to vacate the home could be significantly longer than if you had been in a standalone building. You have to be careful about budgeting your Loss of Use coverage or you may run out of money before repairs are completed. There are two steps you can take to avoid reaching your limit and having to incur those increased costs out of pocket.

#1 Push the Condominium for Faster Repairs

Get in contact with your Condo Corporation or board and push for faster repairs. Condo board members are elected by residents to manage the rules, maintenance and repairs, and the use of the condo fees. Not all of the affected unit owners or tenants will have the same level of insurance coverage. Contact the board and stress the urgency of your situation. You can also press them for information about how long repairs are expected to take and budget according to their timeline.

#2 Budget Your Expenses According to Your Limit

You can push the Condo Corporation or board for faster repairs, but ultimately the time it takes will be determined by the extent of the damage, the contractors hired, and other factors outside of your control. While you may not b able to control the rebuild process, you can control your Loss of Use budget. There are a few ways you can trim your Loss of Use spending:

• Find appropriate accommodations. If your limit is $5,000, don’t book yourself into a hotel that costs $500 a night. Immediately after a fire, a hotel can be the easiest place to stay, but depending on how long the repairs will take, consider taking on a short-term rental at a lower cost per night.
• Find accommodations with a kitchen. Loss of Use insurance will cover food expenses above your usual expenditure, i.e., the difference between your ordinary grocery bill and what you have to spend because you do not have access to your own kitchen. Limiting takeout expenses can leave more room in the budget for a nicer long-term accommodation.

Your expenses will also be reviewed by the insurance company’s adjuster for eligibility. Dealing with the insurance adjuster may not be ideal when you’re already living in temporary accommodations and coping with loss after a fire. It can be stressful to advocate for yourself and make sure you are accurately compensated. Many people find they need help dealing with an insurance adjuster when they are handling Contents or Loss of Use insurance.

If you have more questions about your condo insurance after a fire, get in touch and explore our resources pages. We have experienced the loss that comes from a house fire first-hand.