Condominium Fire

[BarryMcGuire]

The Valhalla highrise condo here in Edmonton had a fire in one suite last week. 46 other suites sustained water and/or smoke damage.

See whole story: http://bit.ly/dKenXZ

110 NOT DAMAGED, but everybody has to move out for at least 4 months. Apparently, they found asbestos that needs to be removed from the whole building! Apart from inspection issues, what about insurance?

The insurance companies are saying to those 110 owners, "You haven`t suffered any damage, we don`t have to pay you anything for your hotel, mortgage payments or any other expenses."

The condo corporation is saying, "You still have to pay your condo fees of $467 per month." Undoubtedly, there will be a large special assessment.

If you own a condo, rental or owner-occupied, better ask whether the blanket insurance policy on the common property would compensate you in these circumstances. The answer is most likely NO. If you have a supplementary policy covering the interior of your unit, better ask the same question. If the answer is NO, ask if you can purchase a rider that would cover this situation.

I think we all tend to minimize the need for building inspections on condos. I think you absolutely need it on your own unit and, for older buildings, you should ask your inspector about common property issues, including whether he thinks there might be asbestos. My guess is that the 4-month estimate to fix the Valhalla is way too optimistic.

Could you carry all of the expenses of your unit for the 6 - 12 months that I think it will take to remove all the asbestos, fix the fire and smoke damage and let everybody move back in?

 

[Mike Milovick]

This is from my insurance broker when I asked last week for clarification of "special assessment coverage." Note this is for Ontario. I hope it helps:

This is coverage in the event of damage to the building if the condominium corporation does not have sufficient funds to repair a common element and the condo corporation has assessed a portion of the repair costs on each of the unit owners to help cover costs



Above is a copy of the wordings for this coverage - revised into english terms....( as opposed to insurance jargon)

Let me know if you want me to provide further clarification!



The best example I can think of is if there is a fire inthe building - let`s say $ 1,000,000 is the estimated repair costs. However, the building is only insured for $900,000. Therefore each of the unit owners is charged an assessed portion of the deficiency in order to make up the $ 100,000 difference.



Have a great day!



Pamela



Van Allen Insurance

622 Elma St. W.

Listowel, ON

N4W 1W3

519-291-2470

519-291-2471 Fax

 

[mikewilsoninsurance]

Condominium Unit Owner's Loss Assessment Coverage


"The coverage is subject to the policy deductible and covers the insured unit owner's share of special assessment levied by the Condominium Corporation for direct loss or damage to the Condominium property collectively owned by the unit owners and caused by a peril insured against (fire) under the C.U.O.P. form."


My advice: don't try to save a buck, make sure you purchase Special Assessment Coverage. It may save your investment!