What type of insurance should new “Condo” owners be looking for?

Buying your first home is a momentous occasion. For many of us, our first home purchase is a condo. Condominiums, especially pre-construction condos, are great way for us to get into the housing market. However, before you move in, you need to understand what stage the condo corporation is to ensure that you buy the appropriate insurance to protect your new home and your belongings.

Often when purchasing a new condo, move-in dates for individual units come in stages, which may include residents moving into their units before construction is completed on the rest of the project and/or the condominium corporation takes full ownership of the building. This is called interim occupancy and is governed by the Condominium Act of Ontario and/or the various condominium acts across the country. As your building nears completion, the vendor will advise you of your interim occupancy date and once the interim occupancy date arrives, you can live in your unit. However, it’s important to note that your condo isn’t officially a condo yet. 

The reason for this is because ownership of your unit can only be transferred to you if the condominium has been registered with the municipality, which can only be done once all the units are completed. The period from your interim occupancy date to the date ownership is transferred to you is called your interim occupancy period.

Prior to being registered with the municipality, homeowners may be surprised to find out they do not have insurable interest in the condo. Effectively, if the buyer moves in, they are renting the property. Until the property is legally owned, the ‘tenant’ has no insurable interest in the property, outside of their personal contents, improvements, or betterments, and is classified as renter/tenant. 

To protect against this, homeowners should be buying a tenant’s package or a contents package. These types of packages would include liability, contents, and any improvement or betterment that was added after the homeowner moved in. Once the condominium is registered the insurance needs to transition to a condominium unit owners policy.

Homeownership provides enough surprises along the way, ensuring you have the right insurance package helps you avoid many unexpected risks.