Review Your Insurance Annually

The article emphasizes the importance of reviewing condominium insurance annually, especially in the current hard market and facing higher construction costs. The insurance premium is based on the Total Insurable Value (TIV), which reflects the full replacement cost of the property, including materials, labor, fees, and other expenses. Construction costs can fluctuate due to market conditions, so it's crucial to ensure adequate coverage through regular appraisals. Having sufficient insurance coverage reduces liability and financial risk for the corporation and ensures premiums are in line with market conditions. A case from British Columbia illustrates the consequences of underinsured properties, leading to substantial special assessments for unit owners. On the other hand, an up-to-date appraisal prevents overpaying on insurance premiums and addresses potential downswings in reconstruction costs. Condominiums may be subject to a co-insurance clause if they lack up-to-date replacement costs, resulting in additional financial burden for owners in case of a loss. Regular insurance appraisals help avoid unnecessary risks and ensure proper coverage for potential disasters.