Stratis Insurance is dedicated to helping condo owners understand their unique vulnerabilities. One of the most common myths we encounter is the belief that living several stories up in a high-rise shields you from water-related insurance risks. This is simply not the case.
Especially in regions like British Columbia, where a rainy climate contributes to rising insurance claims, understanding your condo insurance policy is critical.
Understanding Overland Water vs. Ground Water
Water damage is a leading cause of insurance claims. To be fully protected, it’s essential to understand the distinction between two key types of water-related coverage:
- Overland Water Coverage: This coverage protects against loss or damage caused by the sudden and accidental accumulation or overflow of a body of water (like a lake or river), or by heavy rain or rapid snowmelt that enters your home from a point at or above ground level.
- Ground Water Coverage: This coverage addresses damage when water enters your home suddenly and accidentally through the basement walls, foundation, or floors.
While an overflow on the ground floor may seem distant, as we will explain, its consequences can easily reach your unit.
The Hidden Risk for High-Rise Residents: Loss of Access
The misconception is that water damage only occurs on the ground floor. While physical damage often starts there, the impact of a severe flood or overflow at street level can affect your entire lifestyle, regardless of your floor number.
Consider a major flood event:
- The basement, where critical infrastructure (like the building’s main electrical room or water pumps) is located, gets flooded.
- This can lead to the disabling of elevators or a complete loss of power and essential services to the entire building.
- If access to your unit is denied by the Strata or local authorities due to safety concerns or necessary repairs, you would be unable to occupy your home.
This is where Overland Water coverage in your personal condo policy steps in. It provides Additional Living Expenses (ALE), which covers the reasonable cost of alternative accommodation and meals while the flood subsides and the building is repaired, ensuring you and your family are taken care of during a displacement.
Protecting Against Strata Assessments
Stratis Insurance must also highlight the risk of the Strata Corporation Assessment.
Did you know that if you accidentally cause damage to the building, for example, a bathtub overflow in your unit causes water damage to the three units below, your Strata Corporation can legally assess you for the Strata’s insurance deductible? These deductibles can be substantial, often reaching hundreds of thousands of dollars.
Your personal condo insurance policy (often called an H-O 6 policy) must include adequate coverage for these Loss Assessment charges to ensure you are protected from this immense financial burden.
Mitigating Risk Through Technology
The industry recognizes the severity of water damage claims. Strata Corporations and developers are increasingly investing in smart technology to mitigate risk. For example, some large community developers are implementing advanced Water Damage Protection Systems. These innovative systems use:
- Instant detection of abnormal water flow.
- Sensors that trigger alarms.
- Remotely operable drain valves.
While technology is an excellent layer of defense, it doesn’t replace the need for comprehensive insurance. It is simply a tool to lessen the extent of a potential incident.
To fully understand your unique exposure and plan your coverage correctly, working with a knowledgeable and trusted Stratis Insurance Advisor is your best first option.
