Ontario condominium corporations are obligated to arrange insurance (against certain perils noted in Section 99 of the Condominium Act, 1998 – the Act) covering the common elements and the standard units.
The corporation’s insurance belongs to both the corporation and the owners. Therefore, even if an owner causes insured damage through negligence, the owner can never be held responsible for loss that is covered by the corporation’s insurance (whether or not the corporation decides to make an insurance claim).
However, the owner can, in certain circumstances, be responsible for the deductible on the corporation’s insurance. [The deductible is just a portion of the loss that is not covered by the insurance. Put another way: The insurance only covers the portion of a loss that exceeds the deductible.]
- An owner is responsible for the deductible in relation to insured damage to the owner’s unit caused by an act or omission of the owner or an occupant of the unit. [Anticipated amendments to the Act will have this apply also to damage to common elements or corporation assets caused by an act or omission of the owner or an occupant of the unit.]
- The corporation can also pass a by-law (an “insurance deductibles by-law”) setting out further circumstances under which the owner is responsible for the deductible. [Anticipated amendments to the Act will require an amendment to the Declaration rather than a by-law.]
Most insurance deductibles by-laws say that owners bear responsibility for the deductible (on the corporation’s insurance) in the following circumstances:
- Where the owner, or an occupant of the owner’s unit, or a guest or agent of the owner, through an act or omission, causes insured damage to any part of the property.
- Where insured damage is caused to the owner’s unit by an accident (i.e. where no one is at fault). However, some insurance deductible by-laws say that owners will only be held responsible for accidental damage to their units if the source of the damage is also within that unit.
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