Coverage Before the Fact

A fire at a condominium complex some time ago left more than 300 people homeless, with damages estimated in the multi-millions of dollars. Later, it was discovered that too many of the unit-holders did not have their own insurance for (a) possessions, (b) liability, plus (c) cost of living expense while their residence was being restored. A condominium corporation can only insure the structure, excluding (a), (b), and (c) above.

One resident affected by fire had individual owner insurance. They were well-looked-after. Their coverage included non-standard upgrades the insured had added and that the condo corporation policy did not cover. The individual owner’s policy was available for an inexpensive premium.

Regulations introduced since the building above had been completed require somewhat wider fire protection inclusion with replacement, so some delay was involved in arriving at a decision about repair or, alternatively, demolition and reconstruction. Naturally, that adds to the burden for uninsured unit owners; this is in contrast to residents who have their own individual owner policies, who could just carry on paying the mortgage if such is involved.

This situation underlines perceived responsibility and opportunity for condo developers, re- altors selling units, condo buyers renting to tenants, etc., as well as insurance agents and brokers, to circulate information pamphlets and stress the crucial need for the individual condo owners to ensure their own insurance coverage is in place from the date of possession.

As a former successful broker, I had clients sign acknowledgement of advice regarding needed insurance coverage so if such a suggestion was ignored, there was a record of them being forewarned.

I will end this treatise with one prime example of the importance of proper insurance coverage before the fact. We had a small land development project in B.C.’s Okanagan Valley. I came to believe we would increase the value of our small village site if we removed four Douglas Fir trees. After arranging insurance rider coverage on our residence policy for the undertaking, our sons and I felled two of the 105-foot-high behemoths. As I proceeded to repeat the exercise with the third tree, disaster struck. As a result of inexperience, I cut the “hinge” that skilled woodsmen leave across the middle of the stump to allow wedging, thereby forcing the tree to fall in the desired direction. Accidentally cutting the hinge allowed the teetering monster to do an ‘allemande left’ and fall across the neighbour’s rented house, which by arrangement was empty of humans at the time. The monstrous load did not bounce; it sheared the roof ridge to the soffit line, doing extensive interior damage as well.

Thanks to the precautionary arrangement for insurance protection, the $9,800 cost of repairs, plus the adjuster’s fee, did not come out of our pocket. A “word to the wise” should be sufficient.