A Cheap Investment for a Good Night's Sleep:
HOME PROTECTION -- Many Condo Owners Neglect
to Buy Home Insurance, Wrongly Assuming it's Paid
for by Their Monthly Condo Fees
By Lin Connery

Whether you're buying a condominium or moving into a rental unit, don't forget to insure your stuff. The building is insured, but your belongings aren't unless you take out a policy for yourself.

Almost two-thirds of people living in rental units don't have renter's insurance, according to an American survey. Canadian renters are probably no better equipped for a disaster, small or large.

"It's a shame because it's not an expensive thing," says Derek Fee, senior public affairs specialist with State Farm. Indeed, renter's coverage is probably the best insurance bargain on the market.

"In Calgary, the cost is less than $150 a year for a base coverage of $20,000 on contents with a $500 deductible, plus a replacement cost endorsable -- which means we pay you what it costs to replace those items -- and $1 million in liability coverage."

That's about $12.50 per month, and you'll sleep better at night.

If you have a lot of jewelry or computer equipment, additional coverage may be a wise investment.

"The typical base minimum we see is in the range of about $20,000, but most policies are going to be in excess of the $25,000 figure."

Some renters will either decide their possessions aren't worth insuring, or assume -- wrongly -- that their landlord's insurance will replace any losses.

"You're leaving yourself open to a nasty surprise once that loss happens and it's too late to do anything about it," says Fee.

Meanwhile, some condo buyers will assume -- also incorrectly -- that the insurance charge in their monthly condo fee also covers personal possessions inside their homes.

Most often, none of their possessions are covered. But they can get personal coverage for a little more than renters pay, "maybe $20 or $30 a year more."

The rules are different for single-family homes. If you have a mortgage, the lender requires you to have insurance, and the standard package includes contents insurance, personal liability and additional living expenses.

When you have a mortgage on a condo, the condo fees will insure the building, but it's up to you to insure personal possessions.

"One possible exception: occasionally you may find that major appliances are insured by the condo corporation's policy, but certainly not always," says Mark Terrill, managing partner at the Jones Brown Inc. insurance firm.

The corporation might pick them up because when the development was built, the developer included the refrigerator, stove, washer and dryer and dishwasher in the original sale.

If you've made improvements inside your condo unit -- updated kitchen countertops, for instance, or taken lino out and put hardwood in -- that could be a grey area. Condo bylaws will normally specify who's responsible for insuring upgrades.

"But if I bring something into that unit that's portable, whether it's furniture, a sound system or clothing, those things will always be my responsibility as a unit owner to insure," says Terrill.

So why isn't everyone insured?

"I think a lot of people in condominiums, or in rentals, tend to think strictly about the structure as opposed to the contents," says Fee.

Furthermore, "people typically underestimate the value of what they own."

SOURCE: CanWest News Services, BYLINE: Lin Connery, Copyright 2003 CanWest Interactive, a division of CanWest Global Communications Corp. All Rights Reserved The Vancouver Sun (British Columbia) December 13, 2003 Saturday Final Edition Calgary Herald