Ontario condo insurance: 2025 cost and coverages

What is condo insurance?

Ontario condo insurance provides financial protection for condominiums, covering either the common elements and standard units (through the condo corporation's policy) or the interior of individual units (through personal policies). It is typically mandatory for condo corporations and strongly recommended for unit owners. Condo insurance can help mitigate financial loss due to risks like water damage, fire, theft, or liability claims.

This article is provided for general informational purposes only and does not constitute legal, financial, or real estate advice. Laws change frequently and vary by province. Readers should consult with a qualified professional for advice specific to their individual circumstances.
 

Condo corporation insurance vs unit owner insurance

In Ontario, condo corporations are responsible for insuring common elements and “standard units,” while individual unit owners insure their own personal contents, upgrades, and liability.
 

Condo corporation insurance typically covers:

• The building structure and shared systems (e.g., HVAC, elevators)
   
• Standard units, excluding owner-made improvements
   
• Common elements like lobbies, gyms, parking areas, and hallways
   
• Liability for injuries occurring in common areas

Unit owner insurance may cover:

• Contents of the unit (furniture, electronics, clothing, etc.)
   
• Improvements or upgrades made to the unit
   
• Personal liability for injury or property damage to others
   
• Loss assessment, which can help pay the corporation’s deductible or special assessment

This division of responsibility can lead to confusion during a claim, so open communication with residents about who covers what is essential. Understanding the boundary between these two types of Ontario condo insurance policies is critical.
 

How to select the right condo insurance policy

1. Start by reviewing your current insurance coverage

   Before selecting a new policy, take stock of what coverage your condominium corporation already has. Review your insurance certificates, policy limits, deductibles, and exclusions. Identify any gaps, expired policies, or outdated terms that may no longer meet your building’s needs. This step gives your board a clear starting point for conversations with brokers and helps avoid duplicate or insufficient coverage based on your condo corporation budget.
    

2. Understand legal requirements

   Before finalizing your insurance coverage, make sure your board understands what’s legally required under the Condo Act of Ontario and other regulations. In Ontario, condo corporations must carry insurance for common elements and standard units, as well as liability coverage for directors, officers, and the corporation itself. Laws can change, so it’s a good idea to review these requirements regularly with your broker or legal counsel. Staying informed helps your board make confident decisions and stay compliant. It also positions the board to better evaluate future insurance proposals with confidence.
    

3. Confirm your D&O policy includes retroactive protection

   Directors and officers (D&O) insurance can protect board members, volunteers, and others involved in running the condo from legal claims. It’s a “claims-made” policy, which means coverage depends on when the claim is filed, not when the incident occurred. That makes timely reporting essential. To avoid coverage gaps, boards should also check that their policy includes a retroactive date or “Full Prior Acts” clause, ideally dating back to the corporation’s formation. If not, it may be time to talk to your broker. This type of detail is often overlooked but can determine whether a claim is covered or denied.
    

4. Include all three parts of building ordinance and law coverage

   Property insurance may not be enough if yours is an older condominium. Although many cities and towns require you to meet current building codes if you rebuild, property insurance only covers the cost of rebuilding to original building standards. This leaves you with a coverage gap unless you have all three parts of building ordinance and law insurance:
   
   Loss to the undamaged portion of the building: When a building has incurred severe damage (generally 50% or more), some local building ordinances require that you demolish and rebuild the entire structure and bring it up to code. This part reimburses your corporation as if the building has sustained a total loss, even if it was only partially damaged.
   
   Demolition: This covers the cost of demolishing and removing debris from the undamaged parts of a structure that’s been partially damaged.
   
   Increased cost of construction: This covers the added costs of complying with current codes when you rebuild an older structure. For example, if your older structure was damaged by a major fire, you might have to install a fire sprinkler system.
   
   As a board member, it’s recommended you familiarize yourself with your local building codes so you have an idea of what you would be faced with in the event of having to rebuild after major damage.
    

5. Don’t rely on umbrella insurance for property protection

   All too often, condo boards have the mistaken belief that their umbrella policy will kick in when they’ve exhausted the limits of their property insurance. As a result, they reduce the amount of coverage they have under the property insurance policy assuming they can save the corporation money while still protecting it with the umbrella policy.
   
   Instead, what they are doing is putting their corporation at risk because an umbrella policy only provides extra liability coverage when you exhaust the limits of your general liability policy. It does not provide additional property coverage. Don’t make this very costly mistake; verify that you have the property insurance you need from the start. Confirm with your broker exactly which policy covers what, and how the limits interact, before adjusting any amounts.

Ontario condo insurance: How your condominium management company can help

Staying on top of your condo corporation’s insurance needs isn’t easy. That’s why it’s important to partner with a condominium management company that can help you find the right coverage.

At FirstService Residential, we go the extra mile. We provide our managed communities with exclusive access to the enhanced insurance products offered by our affiliate, FirstService Financial. You’ll rest easy knowing you’re getting the coverage you need at the best price possible.

Contact FirstService Residential for more information on how we can help you with your condo insurance needs.