When buying a condo, many people know that the building is required to have insurance. The issue is when they assume that the building insurance also covers everything inside their unit.
If you rely on the building’s insurance, the first problem is that their deductible may be considerably higher than yours. The second problem is that their insurance may not cover you at all. If the claim is for liability or negligence, the building’s insurance is unlikely to cover you; additionally, if there is damage to another unit because of a fire or flood in your unit, they may decline to cover you. Finally, even if the insurance does cover damage within your unit, it will only cover the basic unit; any upgrades, such as better flooring or a new kitchen, would not be covered and you would be out of pocket to cover re-upgrading – in addition to the contents of your unit.
If you are buying a condo, you should always obtain a condo insurance policy. Your insurance broker can help you choose the right policy for you.