An important development in the law will soon affect all condominium owners in Alberta.
Pursuant to the Condominium Property Act, Condominium Corporations in Alberta must have an insurance policy. Such policies typically have deductibles. There have been many disputes and legal cases dealing with whether the Corporation or the Unit Owner should pay the deductible.
However, disputes about the obligation to pay the deductible will change very soon.
Effective January 1, 2020, pursuant to s.62.4 of the new Condominium Property Regulations, Condominium Corporations will be able to seek recovery of the deductible from the Unit Owner, to a maximum of $50,000.00, where an insured loss originates within the Unit or Privacy Area of that Unit Owner. Simply put, if a loss originates in your Unit, you may have to pay the deductible on the Corporation’s policy.
To protect themselves Unit Owners should consider the following:
1. Ensure they have their own Unit Owner insurance policy;
2. Confirm that their Unit Owner policy has deductible coverage, or that it will pay for the Corporation’s deductible if the Unit Owner is obligated to pay the deductible of the Corporation;
3. Confirm the amount of the deductible for the Condominium Corporation’s insurance policy;
4. Confirm that the value of deductible coverage in their Unit Owner policy is at least equivalent to the value of the Condominium Corporation’s deductible; and
5. Pay attention to any notice from the Corporation which changes or increases the amount of the Corporation’s deductible, and increase their coverage (to a maximum of $50,000), as required.
It is important to note that “deductible coverage” is not the same as special assessment coverage.
Unit Owners should possess written confirmation from their insurance provider that they have deductible coverage for the Corporation’s deductible. If they are not able to obtain this coverage, or obtain the necessary amount of coverage, there may be other brokers who are able to provide the required type and amount of coverage.