Insured Damage

When dealing with damage to a condominium property, whether to the common elements or to standard unit(s), the first question is: “Is this insured damage?” If the answer to this question is “yes”, special insurance principles apply.

By “insured damage”, I mean damage of a sort that is covered by the condominium corporation’s property insurance policy, if one ignores the deductible. [I use the term “deductible loss” to describe insured damage falling within the deductible.]

Sections 99 (1) and (2) of the Condominium Act list perils that must be covered by the corporation’s insurance. But the insurance policy can, and normally does, provide additional coverage.

If you conclude that damage is “insured damage”, the following principles apply:

• An owner can never be held responsible for any insured damage that is covered by the corporation’s policy. This is because the corporation’s policy is for the corporation and for all owners.
• Insured damage is still insured damage if the corporation decides not to make an insurance claim. But if the corporation decides not to make an insurance claim, the corporation must pay any amount that would have been paid by the insurer if a claim were made.
• Responsibility for the deductible loss is determined under Section 105 of the Condominium Act (including any insurance deductibles by-law passed by the corporation).

Again, these principles only apply in the case of “insured damage”. In order to determine whether or not particular damage is “insured damage”, you could:

• Ask the corporation’s insurer (even if no insurance claim is being submitted). [You could begin by asking the question to the broker. The broker may be able to answer, or the broker may ask the insurer, and the insurer may have an adjuster investigate and respond.]
• Review the insurance policy or have the corporation’s legal counsel review the policy.