Condo insurance: Impact of changes to the Civil Code of Québec (Bill 141)
The adoption of Bill 141 has led to several changes to the Civil Code of Québec affecting divided co-ownerships—i.e., condo buildings. These changes came into effect in December 2018. Keep reading to find out more about the main changes affecting affecting condominium owners.
Condo associations now responsible for repairing damage
When a loss occurs, condo associations are now responsible for repairing all damage to the insured property, including damage to the individually owned portions of the building (each condo owner’s unit). Any damage to improvements condo owners have made or to their personal belongings is not covered.
When a condo association submits a claim to its insurance company, some expenses may still not be eligible for reimbursement, such as:
- All applicable deductibles
- The portion of damage that exceeds the insurance policy limit (e.g., a sewer back-up causes $125,000 in damage, but the insurance policy has a $100,000 limit)
- The total cost of all damage if the risk that has caused the loss isn’t covered under the insurance policy
Here’s how condo associations can recover these amounts:
If the loss was not caused by a condo owner
Sometimes none of the condo owners are at fault. Loss assessment is when the condo association shares responsibility for the damage with all condo owners.
A building’s main electrical panel breaks and causes damages to the building. The condo association’s insurance company takes care of the repairs, but the condo association must pay a $10,000 deductible.
The condo association can then split this cost among all condo owners, regardless of whether specific units or common areas were affected by the damage.
If the loss was caused by a condo owner
If a condo owner is found at fault, the condo association may ask them to pay the entire amount not covered under the association's insurance policy.
You don’t put your cigarette out properly, and this starts a fire in your unit that spreads to other parts of the building. The condo association’s insurance company takes care of the repairs, but the condo association must pay a $10,000 deductible.
Since the fire was your fault, the condo association may ask you to reimburse the $10,000 deductible it had to pay.
Even if your condo association covers the damage to your unit and submits a claim under the building’s insurance policy, we recommend that you also contact your personal condo insurance company to let them know what has happened.
Impact on clients insured with The Personal
If the loss is covered under your personal condo insurance policy, we’ll reimburse you for any costs you’ve shared with your condo association for damage to any parts of the building—i.e., your unit, another condo owner’s unit or the common areas (lobby, stairwells, common room, etc.). Keep in mind that every time you submit a claim, you’ll need to pay the deductible on your policy.
A fire damages your building, and your condo association sends you a bill for $800 to recover amounts not covered under the building’s insurance policy. After you pay your condo insurance policy’s $500 deductible, you can claim the remaining $300.
If the amount the condo association bills you for is less than the deductible on your condo insurance policy, you can’t claim anything (i.e., if you’re billed $350 and your deductible is $500, you won’t be reimbursed).
What you see on this page is based on information that was made public on March 25, 2019.