House, Condo & Tenant Insurance in British Columbia: Frequently Asked Questions

Important Disclaimer: The information on this page is provided for general educational purposes only and does not constitute insurance advice. Insurance policies, coverage limits, exclusions, and terms vary between providers and individual circumstances. You should always consult with a licensed insurance professional before making any insurance decisions. A qualified insurance broker can review your specific situation, explain your policy options, and ensure you have adequate coverage for your needs. 

We recommend: Rosy Puri-Manhas, MBA, CIP, CAIB, Managing Director, Cascade Insurance Agencies rmanhas@cascadeinsurance.ca

Sources for this page include information from sheets prepared by Cascade Insurance Agencies, the IBABC Strata Insurance Handbook (Insurance Brokers Association of British Columbia, 2020), the Province of British Columbia's strata housing and residential tenancy resources, and BC legislation.

General Questions — For All House and Condo Owners & Tenants

What is the difference between the strata corporation's insurance and my personal insurance?

BC's Strata Property Act requires strata corporations to insure common property, common assets, buildings shown on the strata plan, and original fixtures to full replacement cost. However, the strata corporation's insurance does not cover personal liability, household contents, expenses to live elsewhere after a loss, or paying the strata corporation's insurance deductible (Province of British Columbia, Strata Owner and Tenant Insurance). Every owner and tenant needs their own individual insurance policy to cover these gaps. A licensed insurance broker can help you understand where the master policy ends and your personal coverage begins.

What is personal third-party liability insurance?

Personal liability coverage is a component of both condo owner and tenant insurance policies. It protects you financially if you are found legally responsible for accidentally causing bodily injury to another person or damage to someone else's property. The IBABC Strata Handbook states that a unit policy "provides personal liability coverage for any bodily injury or property damage unintentionally caused to others." In a strata building — where units share walls, floors, and ceilings — the risk of accidentally causing damage to a neighbouring unit is significant, particularly from water. Discuss appropriate liability limits with your insurance broker.

How does personal liability insurance protect me in a water leak scenario?

Water leaks are one of the most common and costly events in BC strata buildings. Consider this scenario: a pipe or appliance in your unit fails, or a bathtub overflows, and water leaks through the floor into the unit below, damaging your neighbour's ceilings, walls, flooring, and belongings.

According to the IBABC Strata Handbook, if a neighbouring unit is damaged, its owners will claim against their own unit insurance policy, and their insurer will then determine whether to seek compensation from the insurer of the unit where the damage originated. Additionally, the strata corporation can sue the unit owner to recover the building policy's deductible if the loss originated in that owner's unit — and landmark court cases in BC have established that the owner does not even need to have been negligent or at fault to be held responsible for the deductible (IBABC Strata Handbook, p. 8).

Your personal liability coverage responds in these situations, covering the cost of damages you are legally responsible for (up to your policy limits) as well as legal defence costs. Without it, you would be personally responsible for what can be a very substantial expense. The IBABC Handbook notes that building-policy deductibles of $25,000 are common and can range to $100,000 or more. Always consult a licensed insurance professional to ensure your liability limits are adequate.

What is Additional Living Expenses (ALE) coverage?

ALE coverage helps maintain your standard of living when an insured loss — such as a fire, flood, or major water damage — makes your home uninhabitable while repairs are being made. According to the IBABC Handbook, this coverage can include short-term or long-term rental of accommodations and restaurant meals. ALE applies only to insured losses (not voluntary moves or evictions) and covers only the increase in your living costs, not your regular rent or mortgage. Keep all receipts, as insurers reimburse based on actual expenses incurred. Coverage limits vary by policy — often calculated as a percentage of your contents coverage. Confirm your ALE limits with a licensed insurance professional.

How does ALE differ between condo owners and tenants?

For condo owners, your unit owner policy usually includes ALE covering hotel stays or temporary housing, increased living costs while your unit is repaired, and in some cases, loss of rental income if you rent part of your unit. For tenants, your renter's insurance typically includes ALE for temporary accommodation and extra living costs, but it does not cover building repairs (that is the landlord's and strata's responsibility) — it covers only your own increased living expenses to maintain your usual standard of living elsewhere.

Does ALE apply to tenants in a rented house (non-strata), not just condos?

Yes. ALE coverage on a tenant insurance policy applies regardless of whether you rent a condo unit, a townhouse, a basement suite, or a standalone house. If an insured event — such as a hot water tank suddenly rupturing and flooding the home — makes your rental uninhabitable while repairs are underway, your tenant insurance ALE coverage can help pay for temporary accommodation (hotel, short-term rental), increased meal costs, and other additional expenses above your normal cost of living. This is a critical coverage because, as explained in the tenant section below, you may still be required to pay your regular rent even while you are displaced and paying for alternate housing. Without ALE coverage, you could find yourself paying two sets of living expenses out of pocket. Always confirm your ALE limits with a licensed insurance broker.

What is a strata deductible buy-back?

A deductible buy-back (sometimes called a "top-up" or "buy-back") is an optional insurance add-on that helps close the gap when the strata corporation's deductible — particularly for water damage — exceeds what your personal condo policy's assessment coverage provides. It acts as a top-up: first the strata's insurance and your condo owner's policy respond, and if there's still a shortfall because the strata deductible is higher than your policy's assessment coverage limit, the buy-back kicks in to help cover that difference.

Specifically, the Strata Water Deductible Buy-Back covers the portion of the strata's water damage deductible assessment that your standard condo policy might not otherwise cover. It typically covers water damage and sewer back-up related deductible assessments but generally does not cover earthquake, flood, fire, rental income loss, or additional living expenses — only the deductible assessment difference.

There are eligibility requirements: you typically need both a strata corporation's policy and your own condo unit owner's policy in place first. Units often need a clean loss history (no water damage claims in the last 3–5 years in many cases) and may need to be owner-occupied or meet certain rental/ownership conditions (short-term rentals are often excluded). There is usually a deductible on the buy-back itself (e.g., a minimum of $25,000 in some offerings). Ask your insurance broker whether this add-on makes sense for your strata's specific deductible levels.

What should I watch out for with buy-back coverage?

Consider the cost vs. benefit — compare the extra premium against how likely a loss is and how large the deductible exposure is in your strata. If your strata's deductible is modest, the extra premium may not be worthwhile. There are typically limits and thresholds, and the buy-back itself has its own deductible. Recent past water damage claims may affect your eligibility or pricing. You will also need copies of the strata's policy documents to confirm exactly what deductible applies and ensure your policy terms will trigger this coverage. A licensed insurance broker can walk you through the trade-offs for your specific building.

For Landlords (Condo Owners)

Why do I need my own condo insurance if the strata corporation already has a building policy?

The strata's master policy covers the building structure and common areas as originally constructed. The BC Government states clearly that strata corporation insurance "does not cover personal liability, household contents, expenses for owners or tenants to live elsewhere after a loss, or paying the strata corporation's insurance deductible" (Province of British Columbia, Strata Owner and Tenant Insurance).

Your individual condo owner's policy (often called a "condo policy") fills these critical gaps, including:

• Personal belongings and contents — furniture, clothing, electronics, household goods, appliances

• Betterments and improvements — if your unit has been renovated (even by a previous owner), you as the current owner are responsible for insuring the upgrades (IBABC Strata Handbook, p. 8)

• Personal liability — if someone is injured in your unit or if you accidentally cause damage to another unit or common property

• Additional living expenses or loss of rental income — if your unit becomes uninhabitable

• Coverage gaps — where the strata's master policy stops, particularly for interior walls, fixtures, and flooring beyond original construction

• Loss assessment coverage — pays your share of major property and liability losses on common property that exceed the strata's policy limits, or a deductible assessed to you

• Contingency coverage — insures your unit if the strata corporation's insurance is insufficient or does not respond, including damage below the strata deductible (IBABC Strata Handbook, p. 8)

Without your own policy, you bear all of these costs personally. A licensed insurance broker can tailor your coverage to match your unit's improvements and your building's deductibles.

As a landlord, how does personal liability insurance protect me if there's a water leak from my rental unit?

This is a critical area. The IBABC Handbook is explicit: if a leak originates in your unit and water spreads to other units or common areas, you could be liable for the cost of repair — whether you live in the unit or are renting it to tenants. Many strata corporations have passed bylaws making owners "strictly liable" for losses that originate from their units. For example, if a washing-machine hose fails and water damages other units and common areas, the owner can be held responsible for the building policy deductible or the full cost of repair if it is less than the deductible — regardless of fault (IBABC Strata Handbook, p. 17).

Your condo owner's personal liability coverage and deductible assessment coverage respond in this situation, covering costs up to your policy limits. Without adequate coverage, you could face a bill of $25,000 to $100,000 or more for a single water event.

Can the strata corporation come after me for the insurance deductible even if the leak wasn't my fault?

Yes. The Strata Property Act (s. 158) permits the strata corporation to sue an owner to recover the deductible if the loss originated in that owner's unit. Furthermore, many strata corporations have adopted bylaws that impose strict liability on unit owners for losses originating from their units. The IBABC Handbook notes that landmark court cases have confirmed that the owner does not need to have been negligent, careless, or legally at fault to be held responsible for the deductible (IBABC Strata Handbook, p. 8). This makes deductible assessment coverage on your unit owner's policy essential. A licensed insurance broker can explain your specific exposure based on your strata's bylaws and deductible levels.

What liability limits should I carry as a condo owner-landlord?

The strata corporation is required to carry a minimum of $2 million in liability insurance for the building (Strata Property Act, s. 150). For your personal unit policy, liability limits and deductible assessment coverage should be discussed with your insurance broker, taking into account your strata's specific deductibles (particularly for water damage), the value of surrounding units, and your building's risk profile. The IBABC Handbook strongly advises providing your broker with a copy of the building policy declaration and your unit entitlement so they can tailor your coverage accordingly.

Should I require my tenants to carry insurance?

Yes. The IBABC Handbook states that insurance brokers and landlord associations recommend that strata owners who rent their units to tenants include in their rental agreements the requirement that tenants purchase tenant insurance. The BC Government echoes this, noting that "often a landlord will require a tenant to obtain tenant insurance and renew the policy annually" (Province of British Columbia, Strata Owner and Tenant Insurance).

This protects both your tenant and you. If your tenant has liability coverage and causes damage to a neighbouring unit, their policy can respond, potentially preventing or reducing a claim against your own policy. The IBABC Handbook advises landlords to include this requirement in the rental agreement at the outset, as it is difficult to retroactively add requirements to the agreement.

Does my condo insurance cover loss of rental income?

Some condo owner policies include loss of rental income coverage if your unit becomes uninhabitable due to an insured event and your tenant must vacate while repairs are made. This is not automatic on all policies. Confirm this coverage with your broker, particularly if the unit is an investment property and rental income loss would impact you financially. The IBABC Handbook notes that owners who plan to rent their units should review coverage options specific to their rental activities with their insurance broker.

What practical steps can I take to reduce water damage risk in my rental unit?

The IBABC Handbook recommends several proactive measures:

• Ensure tenants know where the water shut-off valve for the unit is located so they can shut water off quickly in the event of a leak

• Verify that washing machines in the unit have braided steel hoses — failed rubber hoses are a chronic cause of water damage in strata buildings

• Remind tenants to use less soap in dishwashers and washing machines (BC's naturally soft water requires less detergent, and excess suds can temporarily block pipes)

When pinhole leaks start occurring with regularity, arrange a professional assessment of the building's piping system

For Tenants (Renters)

Why do I need tenant insurance?

The strata building's master policy and your landlord's condo owner policy do not protect your personal belongings. The IBABC Handbook states plainly that "losses suffered by, or incurred by, tenants or their visitors are not covered by the insurance policies of the strata corporation or the landlord."

The Province of British Columbia advises that tenants are strongly recommended to purchase insurance to cover their needs, and specifically notes that "personal liability coverage is also recommended as tenants can be held responsible for damage they, or their visitors, cause to the building or common property" (Province of British Columbia, Strata Owner and Tenant Insurance).

Tenant insurance provides:

• Personal contents coverage — furniture, clothing, electronics, and household goods against risks like fire, theft, and water damage

• Personal liability protection — if you accidentally cause damage to the building, your landlord's property, or a neighbouring unit

• Additional living expenses — if your rental becomes uninhabitable due to an insured event, covering temporary housing and increased living costs above your normal cost of living

This applies whether you rent a condo, townhouse, basement suite, or standalone house. Talk to a licensed insurance broker about the right level of coverage for your situation.

How does my liability coverage protect me if I cause a water leak that damages the unit below?

Tenants are responsible for damage they may cause to any part of the building or common property (IBABC Strata Handbook, p. 9). If water from your unit leaks into a neighbouring unit due to something within your control — a washing machine hose failure, an overflowing bathtub, or a leak you failed to report — you could be held financially responsible for the resulting damage.

The affected neighbour's insurance would typically cover their own repairs initially, but their insurer may then pursue you (through a process called subrogation) to recover those costs. Your tenant insurance policy's personal liability coverage responds in this situation, covering damages you are legally responsible for up to your policy limits, as well as legal defence costs. Without tenant insurance, you would need to pay out of pocket — and in a strata building, where water can cascade through multiple floors, these costs can be significant.

What happens if I'm displaced from my rental due to a sudden event like a hot water tank rupture or flood? Do I still have to pay rent?

In many cases, yes — you still have to pay rent even if you cannot live in the unit for a period of time. The Province of British Columbia says that tenants must pay rent during an evacuation and that “tenants should keep paying rent during repairs,” while landlords are responsible for making sure the rental is safe and livable before tenants move back in.

This means that if there is sudden damage — for example, a hot water tank ruptures and floods the home, but the unit can be repaired — you may have to keep paying your regular rent while also paying for temporary accommodation somewhere else. This is sometimes called paying “two rents.”

There is an important exception. In very serious cases where an event like a fire or flood makes the home truly uninhabitable and it is not realistic for the tenancy to continue, the tenancy may be legally “frustrated.” The BC Government explains that when a tenancy is frustrated, the tenant does not have to pay rent after the event, and any rent paid for the period after the event should be reimbursed. Whether a specific situation counts as “frustration” can be disputed and may need to be decided through the Residential Tenancy Branch (RTB).

The Province also advises that tenants should talk to their landlord about compensation if they cannot use their home during repairs, and that tenants can apply to the RTB for a temporary rent reduction order — but this is not automatic and requires an application and hearing.

Unless your tenancy agreement says otherwise, BC guidance says that tenants are responsible for finding their own alternate accommodation if they cannot live in their rental after a natural disaster. The Province also tells tenants to check their insurance to see if temporary housing expenses after a disaster are covered, and to contact their insurer right away for support. This is why tenant insurance with Additional Living Expenses (ALE) coverage is so important: it can help with extra costs of temporary housing when you are displaced by an insured event, while your rent may still be due if the tenancy is ongoing.

Can a tenancy end if the rental unit is completely destroyed or permanently uninhabitable?

Yes. Under BC law, there are times when a tenancy may end due to unforeseen circumstances — such as a flood, fire, or earthquake — that make the unit uninhabitable. This is known as "frustration" of the tenancy agreement. In these cases, neither the landlord nor the tenant has to give notice to end the tenancy (Province of British Columbia, Special Circumstances to End a Tenancy). The RTB's Policy Guideline on Frustration (Guideline 34) explains that a contract is frustrated when, without the fault of either party, it becomes incapable of being performed because an unforeseeable event has radically changed the situation.

If the unit is damaged beyond repair, the BC Government advises that the landlord and tenant should make a written agreement to end the tenancy. Once both parties agree to end the tenancy, the tenant no longer has to pay rent, and the landlord must return any rent paid after the agreement is made, as well as the damage deposit and any pet deposits (Province of British Columbia, Natural Disasters and Tenancy).

However, if the unit is temporarily uninhabitable but repairable — which is the more common scenario with events like a hot water tank failure — the tenancy generally continues, rent remains due, and the tenant must find alternate accommodation in the meantime. This is the scenario where ALE coverage is essential.

What does tenant insurance NOT cover?

Tenant insurance generally does not cover:

• Building repairs or structural damage — that is the responsibility of the landlord's and strata corporation's insurance

• Damage from gradual or maintenance-related leaks that you knew about but failed to address

• Flood and earthquake — these are typically optional add-ons that cost extra; the BC Government advises tenants to discuss the cost of the earthquake deductible with an insurance broker (Province of British Columbia, Strata Owner and Tenant Insurance)

• High-value items — jewellery, sports equipment, musical instruments, and similar items may have sub-limits on your policy and might require additional scheduling (Province of British Columbia, Strata Owner and Tenant Insurance)

Always review your policy's exclusions and sub-limits with a licensed insurance professional. The BC Government recommends tenants review and discuss insurance and exclusions each year with a knowledgeable broker when they renew.

Does my tenant insurance cover my roommate's belongings?

Not automatically. Most tenant insurance policies cover only the named insured and their immediate family members living in the unit. Roommates typically need their own separate tenant insurance policy. Confirm with your insurance broker.

What happens if I'm displaced by a water leak from ANOTHER unit?

If water from a neighbouring unit or common property makes your rental uninhabitable, your tenant insurance's ALE coverage can help pay for temporary accommodation and increased living costs while repairs are made. Your ALE coverage responds regardless of who caused the water damage. Keep all receipts, as insurers reimburse based on actual expenses. Unlike an owner's ALE, a tenant's ALE does not cover building repairs — it covers only your own increased living expenses above your normal cost of living. Remember: your rent obligation to your landlord likely continues during this period, making ALE coverage even more important.

What additional coverages should I consider as a tenant?

The BC Government notes that tenants can also purchase coverage for: a home-based business, water damage, sewer backup, and earthquake (Province of British Columbia, Strata Owner and Tenant Insurance). The IBABC Handbook adds that coverage for high-value belongings should also be discussed with your broker. Insurance for tenants, including exclusions, should be carefully reviewed each year with a knowledgeable insurance broker.

Understanding Strata Insurance in British Columbia

How does strata insurance work in BC?

BC's Strata Property Act sets the foundation for strata properties to be insured through a combination of at least two insurance policies: one for the buildings and common amenities (arranged by the strata corporation), and one obtained by individual owners for their own property (IBABC Strata Handbook, p. 6). Additional coverage may be provided by tenant insurance or home warranty insurance for new homes. The strata corporation's insurance is a common expense funded through strata fees and approved at the annual general meeting.

What does the strata corporation's building policy typically cover?

The strata corporation must repair and maintain common property and common assets, and the property must be insured for full replacement value against major perils set out in regulation (Strata Property Act, s. 149). Those prescribed perils include: fire, lightning, smoke, windstorm, hail, explosion, water escape, strikes, riots or civil commotion, impact by aircraft and vehicles, vandalism, and malicious acts. The building policy includes buildings shown on the strata plan, common property, common assets, original fixtures, and liability. Strata corporations must carry a minimum of $2 million in liability insurance (Strata Property Act, s. 150). Earthquake and overland flood are not prescribed perils but are strongly recommended, particularly in southwest BC.

What are the big risks for strata properties?

Earthquakes and water damage represent the most significant risks. The IBABC Handbook notes that experts predict a one-in-three chance of a major earthquake in the Pacific Northwest within the next 50 years. Water escape — from pipe failures, appliance malfunctions, and aging building systems — is the most frequent source of large claims. Strata insurance premiums have been rising significantly across BC, driven by increasing claim frequency from aging buildings, rising construction costs, catastrophic weather losses, and tightening market capacity with fewer insurers willing to participate in the strata market. The BC Financial Services Authority (BCFSA) has also reported on the challenges facing the strata insurance market in BC.

Why are strata insurance rates increasing in BC?

The IBABC Handbook identifies several key factors: increasing claims frequency (particularly from water damage in aging buildings); rising construction and renovation costs; catastrophic weather losses across Canada; global reinsurance cost increases; fewer insurers willing to participate in the BC strata market; reduced investment income for insurance companies; and a prolonged period of suppressed premiums during competitive market years that is now being corrected. These increases have led many strata corporations to raise their deductibles — sometimes substantially — which shifts more financial risk onto individual unit owners and makes personal condo insurance and deductible buy-back coverage increasingly important.

What happens after a loss occurs in a strata building?

When damage occurs, the first priority is health and safety, followed by preventing further damage to property. Contact your insurance broker as soon as possible. Multiple insurance policies may be involved: the strata corporation's master policy, the unit owner's policy, and potentially the tenant's policy. Which policies respond depends on where the damage originated, whether it affects common property or individual units, whether costs exceed the strata's deductible, and the strata's specific bylaws.

If the loss is limited to your unit, you initiate a claim against your unit policy. If the loss extends beyond your unit to common property or other units, the building policy and other owners' policies may also be called upon. Your unit policy provides coverage for losses to your unit and for neighbouring units or common areas for which you would be held responsible (IBABC Strata Handbook, p. 19).

The IBABC Handbook advises: do not admit responsibility for anything until you have discussed it with your insurance broker, as doing so may void your insurance. Document all correspondence, keep a log of conversations, and list all damaged items with photos and receipts.

Where can I get more information?

• BC Strata Housing — www2.gov.bc.ca/gov/content/housing-tenancy/strata-housing

• BC Residential Tenancy Branch — www2.gov.bc.ca/gov/content/housing-tenancy/residential-tenancies

• Insurance Brokers Association of BC — www.ibabc.org

• Condominium Home Owners Association of BC — www.choa.bc.ca

• BC Financial Services Authority — www.bcfsa.ca
  
  

This page is provided for informational purposes only by Nicholls Property Management. It is based on information sheets prepared by Cascade Insurance Agencies, the IBABC Strata Insurance Handbook (Insurance Brokers Association of British Columbia, 2020), the Province of British Columbia's strata housing and residential tenancy resources, and BC legislation. This content is not a substitute for professional insurance advice. Insurance needs vary based on individual circumstances, property type, strata bylaws, policy terms, and the specific coverage available from your insurer. Please contact a licensed insurance broker to discuss your specific coverage requirements.

 We recommend: Rosy Puri-Manhas, MBA, CIP, CAIB, Managing Director, Cascade Insurance Agencies  rmanhas@cascadeinsurance.ca