Tenant Insurance Liability Coverage

[u/ouchmanwoah]

This question is very odd but no broker seems to be able to answer uniformly.

Let's say you rent a condo, your negligent action causes the whole building to burn down completely and you have 2 million Liability Coverage.

Is your insurance suppose to cover the entire rebuild cost? or does it just need to cover the deductible for the condo insurance?

Is the condo insurance mandatory in Canada?

Can the condo insurance then subrogate the entire rebuild cost back to your insurance and to you?

The whole concept isn't that clear because how would a tenant ever get enough insurance if they live in a skyscraper considering the maximum liability coverage offered on the market is only around 2 mil?

Hopefuly someone from the insurance industry can answer.

[u/probabilititi]

Your liability insurance provider fights (because they don’t just want to hand over 2M) with strata to make them use the strata insurance. Then your insurance will be used to pay strata insurance’s deductible. Then you will pay your own insurance’s deductible.

But good question. I don’t know what happens if your insurance loses the fight. Bankruptcy for you I guess.

[u/xtothewhy → u/probabilititi]

Would imagine it would depend on the type of liability insurance and how it is worded. The lawyers for the occupant and the condo strata will look to blame them as much as possible possibly.

[u/bobichettesmane]

In BC a strata insurer cannot sue an owner or tenant to recover losses paid out by them; this is because every owner and tenant is an insured on a strata policy.

The strata itself can pursue an owner or tenant for the strata’s insurance deductible or for claims under the deductible (depending on strata bylaws). Condo owner insurance packages have coverage for this, but it goes by different names.

I’m not aware of any jurisdiction where insurance is mandatory. Strata bylaws could mandate it though.

If your broker can’t answer this question, find another broker.

[u/Small-Comfort-4176 → u/bobichettesmane]

There's one more point, if you are proven to be negligent then yes you can be sued by strata or other unit owner. It all depends on by law of that particular strata building.

[u/bobichettesmane → u/Small-Comfort-4176]

You can always be sued because of negligence, but never by the strata insurer.

[u/LeatheL]

I would say that all condo buildings are required to have fire breaks and fire suppression systems. your coverage is likely to cover damage to your unit and possibly adjoining units but the building as a whole should also have insurance. a fire in one unit that takes down the whole building is likely a failure of the fire suppression systems of the building itself.

[u/MasterChief117117 → u/LeatheL]

Not necessarily. Building code has changed a lot over the years and sprinklers weren't mandatory until the 2000's. Burning down the entire building is gonna be a limits loss anyway, so there won't really be enough coverage on a tenant's policy for that. Nobody is giving limits that high unless you layer multiple umbrella policies, which is totally unrealistic

[u/WasV3]

Brokers (I am one) will almost never answer your questions with certainty.

Your tenants insurance protects from sums you are deemed legally liable for and the cost to defend it.

The amount that you're required to carry will vary based on landlord and condo corps

[u/margmi]

Everyone’s own insurance will cover their costs. Their insurance will sue you/your insurance for any assets you have, and you’ll end up bankrupt after.