Dear Tony: We came home from a weekend trip to discover an awful mess in our condo. Somewhere in the strata drainage system there was a blockage and our sink backed up, damaging our new kitchen renovation and hardwood floors.
The strata insurance provider was quick to respond and restorers were on the scene immediately, but we have just been informed by our homeowner insurance provider that our policy did not include coverage for sewer backup for strata lot improvements.
We have become so accustomed to banking, communication and purchasing online, we never gave it a second thought when we renewed our policy for this year.
We reviewed the policy approval and never declined coverage for sewage backup; we just assumed it was part of every policy. As it turns out, it鈥檚 not.
Our cost for the kitchen and hardwood floors is likely around $20,000. Do we have any way of recovering this amount?
John Wilson
It鈥檚 unlikely that you have many options to claim these costs. When we purchase insurance online and click the acceptance box, we are not only accepting the terms and conditions of the contract, but within the online approval sequence there will be some sort of declaration that you are aware and agree to the terms and conditions of the contract and any exemptions.
Corporations prefer online services because it reduces overhead costs, but brokers play an important role in interpreting your policy and ensuring you have the best coverage possible.
There is a remote possibility you could seek a claim against your strata corporation for the cost, but you would be required to prove some sort of negligence and show a history of plumbing failures that have not been attended.
That doesn鈥檛 necessarily make the strata responsible for your loss. In any case, investigate all options closely and consult with your lawyer.
Marjorie Andersen at Hub International advises condo owners to speak directly with a broker and find out what may be exempt from their policies.
Anderson says renewing a policy online can be risky, because you鈥檙e not speaking with a broker who can ask questions about your homeowner policy that could significantly affect your insurance.
鈥淵ou could find that you are simply checking boxes to accept or decline coverage for certain perils without knowing the details or the implications. There are many nuances in strata and unit owner policies alike and every policy is different.
鈥淪ewer-backup coverage is not standard on all homeowner/landlord condo policies and as a result, you may not be covered unless you have specifically requested the additional coverage.
鈥淎nd if sewer backup is included on your policy, the coverage may be limited and subject to a high deductible. Insurance buyers have the right to ask the following questions and get a reliable answer: 鈥楢re there any exemptions/exclusions on this policy? Can I purchase insurance to cover those exemptions? What is the additional cost?鈥� 鈥�
In the insurance industry, we consumers don鈥檛 know what we don鈥檛 know. That is why we use reliable and informed brokers.
听
Tony Gioventu is executive director of the Condominium Home Owners Association