Mandatory Insurance Coverage for Condominium Corporations
What is Mandatory Insurance?
Condominium corporations in Alberta must carry insurance to cover common property, liability risks, and unforeseen damages. The Condominium Property Act and Condominium Property Regulation require corporations to insure against specific risks to protect unit owners and the corporation itself.
Key Insurance Coverages Required by Law
Property Insurance:
Covers common property (e.g., hallways, roofs, elevators, lobbies).
Protects against fire, flooding, storms, vandalism, and other perils.
Liability Insurance:
Covers legal claims if someone is injured on condominium property.
Provides coverage for damages caused by negligence of the corporation.
Crime Coverage (Fidelity Insurance):
Protects against theft or fraud committed by board members, employees, or third parties.
Ensures that condominium funds are secured against financial crime.
Director and Officer Liability Insurance:
Protects board members from personal liability for decisions made in their role.
Understanding Different Types of Condominium Insurance
Common Property Insurance
This policy protects shared areas such as:
Hallways, lobbies, stairwells
Elevators, mechanical systems
Parking lots, gardens, fences
Important Note: Unit owners do not need to insure common property—this is the responsibility of the condominium corporation.
Unit Owner Insurance
Individual unit owners are responsible for:
Personal belongings (furniture, electronics, clothing)
Upgrades (e.g., hardwood floors, custom kitchens)
Personal liability coverage if a visitor gets injured inside the unit
Liability Insurance for the Condominium Corporation
Covers legal costs if:
A visitor slips and falls in a common area.
The corporation is sued for negligence.
Minimum Insurance Coverage Requirements
Condominium corporations must maintain the following coverage:
Coverage Type | Requirement |
Fire & Hazard Insurance | Protects against fire, smoke damage, and electrical fires. |
Weather Damage Insurance | Covers flooding, wind, hail, and heavy snowfall damage. |
Third-Party Liability | Protects against injuries on condominium property. |
Legislative Reference: The Condominium Property Regulation states that condominiums must maintain fire and hazard insurance covering "perils as would normally be insured against in a standard insurance policy."
Notification Requirements for Insurance Coverage Changes
Under the CPA, condominium corporations must notify owners of changes to insurance coverage.
Key Notification Requirements
Changes to Coverage: Owners must be notified of increases or reductions in insurance.
Timing: Notices must be sent within 30 days of a change in coverage.
Details to Include in the Notice:
The new policy details
A summary of changes from the previous policy
The effective date of the change
Failure to notify owners can result in legal liability for the corporation.
Unit Owner Liability for Insurance Deductibles
Under the Condominium Property Regulation in Alberta, unit owners are absolutely liable for up to $50,000 in the event that damage originates from their unit. This means that if an incident such as a water leak, fire, or other insured peril starts within a unit, the owner of that unit is responsible for covering the condominium corporation’s insurance deductible—up to the maximum of $50,000—regardless of fault.
Key Points on Unit Owner Liability:
Mandatory Absolute Liability: The Condominium Property Regulation explicitly states that owners are responsible for the deductible amount if the damage originates in their unit.
Maximum Liability: Unit owners can be charged up to $50,000, even if the deductible on the corporation’s policy is higher.
Insurance Coverage: Owners should ensure their personal condominium insurance policy includes deductible coverage to protect against this financial risk.
Common Examples:
A burst pipe in a unit causes water damage to multiple floors.
An unattended candle leads to a fire that damages common property.
A malfunctioning appliance results in smoke or flooding.
Practical Application:
Scenario: A dishwasher in Unit 203 malfunctions, causing significant water damage to surrounding units and common areas. The condominium corporation’s insurance policy has a $25,000 water damage deductible. Because the damage originated in Unit 203, the owner is automatically responsible for paying the full $25,000 deductible. If the deductible had been $75,000, the unit owner would only be liable for $50,000, as that is the maximum allowed under Alberta law.
Protecting Against Liability:
Unit owners should confirm their personal insurance policy includes deductible coverage.
Condominium managers and boards should educate owners on their liability under Alberta’s condominium laws.
Failure to pay the deductible could result in legal action or a caveat against the unit.
