For many Canadians, condo ownership has long been viewed as a more predictable and lower maintenance path into home ownership. While that can still be true in some respects, recent changes in the insurance landscape are quietly shifting more financial risk from condo corporations to individual unit owners. This shift is catching many buyers by surprise and has important implications for affordability, budgeting, and long term planning.
An insurance industry report highlighted by Insurance Business Canada points to a growing trend that condo owners, lenders, and buyers can no longer afford to ignore. According to reporting on rising condo insurance deductibles and six-figure claim risks, more financial responsibility is being pushed onto individual unit owners as claim sizes continue to grow.
Rising claim costs are changing the insurance equation
Not long ago, a typical condo insurance claim might have been in the range of $5,000 to $10,000, with $15,000 considered high. Today, those numbers look very different. It is now common to see claims of $25,000, $50,000, or even $100,000 related to water damage, fire, or other building issues.
The challenge, according to industry experts, is that many personal insurance policies were never designed to absorb what are effectively commercial sized losses. As claim sizes increase, insurers are responding by raising deductibles, narrowing coverage, or pushing responsibility back onto unit owners.
This means that when something goes wrong, the financial exposure for individual owners can be far greater than they expected.
What is actually included in a condo unit is changing
Another important shift is happening much earlier in the condo development process. During pre construction, the definition of what constitutes a “standard unit” is increasingly being stripped down to its most basic elements. In many cases, the standard unit now includes little more than drywall and subfloor.
Items most owners assume are part of the building, such as flooring, cabinetry, countertops, vanities, baseboards, and even some fixtures, are being defined as the unit owner’s responsibility. If damage occurs, replacing these elements may not be covered by the condo corporation’s insurance.
This change is not always obvious to buyers, especially those purchasing their first condo or assuming that coverage works the same way it did in the past.
Why documentation matters more than ever
When someone says, “I bought a condo,” that statement alone no longer provides enough information to understand their insurance exposure. Two documents are now critical: the standard unit bylaw and the certificate of insurance.
These documents outline exactly what the condo corporation insures, what deductibles apply, and where the unit owner becomes financially responsible. Without reviewing them, it is difficult to assess how much risk an owner is actually taking on.
For buyers and owners, this is not just an insurance issue. It is a financial planning issue.
The impact on affordability and real cost of ownership
Higher deductibles and narrower coverage mean that condo ownership can come with significant out of pocket risk. A six figure deductible shared among owners, or a large uninsured loss tied to unit finishes, can quickly strain a household budget.
This is why it is increasingly important to think beyond the purchase price and monthly mortgage payment. Understanding mortgage affordability in Canada and what you can really afford requires looking at the full picture, including insurance exposure, maintenance fees, and the ability to absorb unexpected costs.
Understanding mortgage affordability in Canada and what you can really afford requires looking at the full picture, not just what a lender will approve on paper. Similarly, many buyers discover too late that qualifying for a mortgage does not always mean the ongoing costs are comfortable in real life. That reality is explored further in this discussion of why on paper affordability is not always enough.
Many buyers discover too late that qualifying for a mortgage does not always mean the ongoing costs are comfortable in real life, which is why it is worth reviewing why on-paper affordability is not always enough before committing to a condo purchase.
Why mortgage planning and insurance awareness go hand in hand
From a mortgage perspective, these insurance shifts matter. Unexpected expenses can affect cash flow, emergency savings, and long term financial stability. In some cases, they may even influence future refinancing or renewal decisions.
Working with a mortgage broker who understands the condo landscape can help buyers and owners ask the right questions early. This includes factoring in higher insurance costs, understanding the risk profile of a specific building, and assessing whether a condo truly fits within a sustainable budget.
A responsible mortgage conversation is not just about securing financing. It is about helping buyers understand the full cost of ownership and whether a property aligns with their financial goals and risk tolerance.
A more informed approach to condo ownership
None of this means condos are no longer a viable option. Many people continue to enjoy condo living and benefit from its convenience and location. What has changed is the importance of due diligence.
Today’s condo buyers and owners need to be more informed about insurance structures, building definitions, and financial exposure than ever before. Asking questions, reviewing documentation, and planning conservatively can help avoid unpleasant surprises down the road.
Final thoughts
The insurance industry’s response to rising claims is reshaping condo ownership in meaningful ways. As more risk shifts to individual unit owners, understanding the true cost of ownership becomes essential.
Whether you are buying your first condo, renewing a mortgage, or reassessing an existing property, taking a broader view of affordability and risk can help you make decisions with greater confidence and fewer regrets.
