How do condo insurance policies differ from
houses?
Condo vs House Insurance — Which One Will Leave You Paying the Most?
Quick answer up front: condo insurance protects your unit, personal property and liability — the condo corporation’s master policy covers the building and common elements. House insurance covers the whole structure, land-related risks and everything inside it. For Georgetown home sellers, that difference changes pricing, disclosure, and buyer expectations. Read on to make sure you don’t lose money at closing.
Why this matters if you’re selling in Georgetown, ON
You’re listing a property in Georgetown, part of Halton Hills. Buyers here are savvy and competition is tight. Lenders and buyers expect clean handoffs. The wrong insurance setup or surprise special assessment can kill a sale or drop your net proceeds. As a seller, you need to understand the gap between condo and house insurance so you can price, disclose, and negotiate without surprises.
The short, brutal breakdown
- Condo insurance = your unit, upgrades, personal property, liability, and often a share of special assessments. The condo corporation has a master policy for the building and common elements.
- House insurance = you insure the structure, outbuildings, landscaping, personal property, liability, and loss of use. There’s no master policy. You bear nearly everything.
If you’re a seller, the practical implications are: buyers will ask for condo corporation insurance details; you must disclose recent claims, reserve fund status, and possible assessments; and your own policy should align with what the master policy already covers.
Key differences explained — what really changes for sellers
Scope of coverage
- Condo: The condo corporation insures the building envelope and common elements under its master policy. Unit owners insure what’s inside their unit and improvements not covered by the corporation. That includes flooring, cabinets, upgraded fixtures, and personal property.
- House: You insure the entire structure and land. If the roof fails, your policy pays to replace it. If lightning hits, your homeowner’s policy covers the rebuild (subject to limits and deductibles).
Why sellers care: when you sell a condo in Georgetown, buyers ask for the corporation’s insurance certificate and bylaws. If the master policy excludes certain items, buyers will demand clarity — and that can become a negotiation lever.
Deductibles and assessments
Condo corporations sometimes carry large deductibles on their master policies. If a claim affects the building, the corporation can levy a special assessment or apportion the deductible across unit owners.
- Typical Ontario reality: master policy deductibles can range from a few thousand to tens of thousands of dollars.
- For sellers: disclose recent claims and the corporation’s deductible history. If your condo corporation recently had a big claim or has low reserves, buyers will either ask for price concessions or demand loss assessment coverage on their insurance.
What you must insure as a unit owner
- Fixtures and betterments (upgrades you or previous owners made)
- Personal property
- Liability (someone slips in your unit)
- Loss of use / Additional living expenses (ALE) — if your unit becomes uninhabitable
- Loss assessment coverage — this protects you if the condo corp levies a special assessment
For sellers: list upgrades in your property disclosure and get a current insurance replacement estimate for those improvements. Buyers will want those figures.
Replacement cost vs. actual cash value
- Houses: policies often offer replacement cost coverage for the structure. That means rebuilding to current standards.
- Condos: your unit-owner policy should use replacement cost for improvements and personal property where possible. If it’s only actual cash value, buyers may be underinsured and face shortfalls after a claim.
Tip for sellers: confirm replacement-cost coverage for improvements that add value. That helps buyers avoid surprise costs and keeps the sale smooth.
Georgetown-specific insights and market trends (what local sellers must know)
- Demand for condos in Georgetown has risen as buyers priced out of the GTA look for commuter-friendly towns. That drives expectation for turnkey units.
- Buyers expect transparency: condo status certificates, recent AGM minutes, reserve fund studies, and proof of insurance for the corporation. Incomplete records slow deals.
- Older condo buildings in Georgetown may have deferred maintenance or smaller reserve funds. That raises the risk of special assessments. Sellers should proactively gather documentation to avoid renegotiation.
- Detached home values in Georgetown remain strong. House buyers focus more on flood risk (local low-lying areas), sewer backup coverage, and high-value replacement estimates for upgrades. Sellers should verify home policy limits match the cost to rebuild.
Local action steps for sellers:
- Request the condo corporation’s insurance certificate and recent minutes now — don’t wait for an offer.
- Order a pre-listing insurance review from your broker or agent to flag coverage gaps.
- For houses, get a rebuild estimate to confirm your current policy limits cover replacement cost.
- If your condo building is older, recommend buyers take loss assessment coverage; consider buying it yourself for the listing period to remove objections.
Practical insurance checklist before listing (condo sellers)
- Obtain the condo corporation’s insurance certificate and the most recent AGM minutes.
- Confirm the corporation’s deductible and any recent claims.
- List and document all unit improvements and provide estimated replacement costs.
- Verify your personal condo policy covers betterments, loss assessment, liability, and ALE.
- Share all documents with your listing agent and prospective buyers.
For house sellers:
- Confirm dwelling coverage equals current rebuild cost.
- Check sewer backup and flood endorsements if your property is in a risk zone.
- Provide records of recent claims and any ongoing mitigation work (e.g., new roof, sump pump).
Negotiation and disclosure tips that save thousands
- If the condo corporation has a large deductible or low reserves, put that in the property disclosure and price accordingly. Buyers don’t like surprises; priced transparency closes deals faster.
- Offer a short-term loss assessment policy purchased just for the listing period if you want to eliminate a common buyer objection. It’s a small cost relative to a lost sale.
- For houses, produce a rebuild-cost report to justify your asking price. Buyers and their insurers will check this; it’s better coming from you than discovered later.
Real examples (how problems actually happen)
- Example A: A Georgetown condo building had a boiler failure. The master policy deductible was $50,000. The corporation levied a special assessment shared across units. Buyers balked when they saw upcoming assessments — sale stalled. If the seller had disclosed and purchased temporary loss assessment coverage, the sale would have closed.
- Example B: A detached home seller assumed the current policy matched rebuild cost. A buyer’s insurer later found the coverage inadequate, leading to a purchase price reduction to cover the buyer’s higher premiums. Pre-listing rebuild confirmation avoids this.
Final rules for sellers who want zero surprises
- Don’t wait for offers to collect insurance docs. Start the paper trail now.
- Know what the master policy covers and where the gaps are.
- Disclose fully. Buyers reward transparency.
- Fix obvious maintenance issues before listing — insurance issues grow out of deferred maintenance.
Call to action — local help that closes deals
Selling in Georgetown? Get a fast pre-listing insurance review and a checklist tailored to your property type. I handle the insurance questions buyers will fire at you and get the documents buyers want to see. Email tony@sousasells.ca or call 416-477-2620. Visit https://www.sousasells.ca for more local guides and listings.
FAQ — Condo vs House Insurance for Georgetown Home Sellers
What exactly does a condo corporation’s master policy cover in Ontario?
Generally the master policy covers the building structure, common elements, and liability for common areas. It does not typically cover unit-owner personal property or sometimes not unit-improvements — the condo documents define the boundary between what the corporation insures and what you must insure.
Do condo owners need loss assessment coverage?
Yes. Loss assessment coverage protects unit owners if the corporation levies a special assessment or if the unit owner’s share of the master policy deductible is apportioned. In Georgetown buildings with older infrastructure, this is a recommended buy for buyers and sellers.
Will condo insurance be cheaper than house insurance?
Often yes — because the corporation covers major structural elements. But your premium depends on your coverage choices (replacement cost, liability limits, deductible) and risk factors (claims history, building age). Net cost to you can be higher if the corporation has poor reserves and frequent assessments.
What should sellers disclose about insurance?
Provide the corporation’s insurance certificate, recent AGM minutes, reserve fund study, and any recent or pending special assessments. For houses, disclose recent claims, mitigation work, and the rebuild estimate you used for your policy.
How do I prove replacement cost for unit improvements?
Gather receipts, contractor estimates, and photos. If those aren’t available, get a local contractor quote to produce a replacement-cost estimate you can share with buyers.
What about sewer backup and flood coverage in Georgetown?
Flood and sewer backup can be major exposures for houses. Condo units on lower levels should also consider sewer backup and overland flood endorsements. Check local risk maps or your insurance broker for details.
Can a seller buy insurance to cover buyer objections?
Yes. Sellers sometimes buy short-term loss assessment or higher liability coverage to remove buyer objections during the listing period. It’s a tactical cost that can save a sale.
Who should I contact to sort this fast?
Contact your local realtor and insurance broker immediately. If you’re in Georgetown and want direct help, email tony@sousasells.ca or call 416-477-2620. I’ll connect you with local brokers and get the documents buyers expect.
If you want a tailored, pre-listing insurance checklist and a fast review of your condo corporation documents, reach out. I handle Georgetown listings daily and make insurance hurdles disappear so your sale closes on time.
Contact: tony@sousasells.ca | 416-477-2620 | https://www.sousasells.ca
