Glossary
Strata Insurance
Strata insurance is the building policy a strata or condominium corporation carries for the shared structure and common property, separate from an owner's own contents coverage..
Strata insurance is the building insurance that a strata corporation — called a condominium corporation in Ontario and some other provinces — carries on behalf of every owner in a multi-unit building. It is separate from the property insurance you arrange for your own unit and belongings.
What the corporation's policy covers
The corporation insures the common property: roof, elevators, hallways, lobby, mechanical systems and parking structures. It typically also insures the original fixtures and finishes inside each unit, such as standard flooring, cabinets and drywall. Where the corporation's coverage ends and an owner's begins is set by provincial condominium or strata legislation and by the corporation's own bylaws, so two buildings can draw that line differently.
Owners generally need their own policy, often called a condo or contents policy, to cover personal belongings, improvements made to the unit (upgraded countertops, for example) and personal liability. Corporation policies usually carry a deductible that can be charged back to the owner responsible when a loss starts inside one unit, such as a burst pipe — one reason an owner's policy matters.
Why lenders and borrowers care
Because the building is the main security for a mortgage, a lender wants proof the corporation's insurance is in place, current and adequate. During financing, the lender may ask for a status certificate or estoppel certificate, which summarizes the corporation's finances, insurance and any special assessments or legal claims. A certificate showing a lapsed policy, an unusually large deductible or a pending claim can slow down or complicate approval.
- Premiums are paid from the strata fee or condo fee collected from owners.
- Rising insurance costs in the building tend to push those fees higher, which affects affordability calculations.
- Personal coverage is not included — you arrange that separately.
A short comparison
Think of the two policies as layers. The corporation's policy is the outer layer covering the structure and shared areas; your own policy is the inner layer covering contents, upgrades and personal liability. Neither replaces the other, and a mortgage lender generally expects both to exist. For a fuller view of ownership costs, see the true cost of owning a home in Canada.
Frequently asked questions
Does strata insurance cover my belongings?
Generally no. The corporation's policy covers the building and common property, not the personal contents of your unit. You usually need your own condo or tenant policy for furniture, electronics, clothing and other belongings, plus personal liability. Because provincial rules and corporation bylaws differ on what is considered part of the unit, confirm the boundary with your corporation or property manager before relying on either policy.
Is strata insurance the same as condo insurance?
They are two different policies that work together. Strata insurance is the building policy held by the corporation for shared areas and the structure. Condo insurance is the individual policy an owner buys for contents, unit improvements and personal liability. Many lenders want evidence that the corporation's policy is active and that the owner also has coverage for the unit itself.
Does my mortgage lender require proof of strata insurance?
Lenders commonly want confirmation that the building is insured, since the unit is their security. In many cases they ask for a status certificate or estoppel certificate showing the corporation's insurance details, deductibles and financial standing. Requirements vary by lender and property type, so confirm exactly what documentation your lender needs before your completion date.
Sources
Related terms
- Strata Fee — A strata fee is a monthly payment owners make to a strata or condominium corporation to cover shared building costs and common expenses.
- Condominium Corporation — A condominium corporation is the legal entity created on registration of a condo plan that owns and manages the building's common elements.
- Property Insurance — Insurance that covers the home itself against perils such as fire, wind, water damage, and theft, required by every Canadian mortgage lender.
- Strata — A strata is a legal ownership structure where each owner holds title to an individual unit and shares ownership of common property with the other owners.
- Status Certificate Fee — A status certificate fee is the charge a condominium corporation levies for a document confirming its financial and legal standing.