How does strata deductible insurance differ from standard homeowners' insurance?

What does Excess Insurance Do?

In the past, deductibles were low that often the strata absorbed the costs when a fellow unit owner caused a water damage loss. But since then, insurance companies entered a hard market and increased deductibles to whip out the majority of small losses. $500,000 Water Damage Deductibles are becoming a thing in Vancouver, 2024.


Strata deductible XS insurance or "Umbrella" coverage sits on top of your existing homeowner’s policy as XS coverage and does not replace or remove the need for you to carry and maintain a basic homeowner’s insurance policy.  
‍

If your current insurance provider cannot meet the deductible coverage you need, you are underinsured and would have to pay the difference or coverage gap out of your own pocket. The good news is that you can now buy XS coverage online in just a few minutes. Visit stratadeductible.com and the service will increase your current limits to get fully protected.

"XS" or "Excess" insurance is a type of coverage that provides additional protection beyond the limits of an underlying primary insurance policy. This kind of insurance kicks in when the claim amount exceeds your current primary policy's maximum payout limit. Here's a break-down of how it works:
‍

How XS Water Damage Cover Works

‍
1. The applicant must have an active homeowner’s policy showing a basic limit covering the "Strata Water Damage Deductible Limit".  The phrase can vary,such as “Deductible Assessment Coverage”, “Strata Deductible Coverage”, or“Condo Deductible Protection.” If they do not see a line that mentions this limit, ask their broker or online retailer for the limit they are covered for. This limit covers damage to other units and by which strata agreement says the 'at fault' unit owner is required to pay the full deductible.

2. Let's assume the applicant has $50,000 Strata Deductible Protection Coverage.  Yet the Strata requires a $250,000 Deductible, There needs to be a $200,000 excess limit policy here.

3. Excess Insurance Activation is required: you must have purchased $200,000 in XS Water Damage Protection using Stratadeductible.com which would make fully covered since if the claim exceeds the strata’s primary policy's water damage deductible limit. Since you have your primary policy ($50,000) and our XS Policy ($200,000) this totals $250,000 enough to pay the Strata Policy Deductible.

Excess insurance has a clear advantage as it provides extra protection in scenarios where the financial fall-out from water damage risks are high, and potential claims could surpass thecoverage offered by standard policies. It's especially useful for individuals living in condo buildings where the strata’s policy deductibles are enough that you cannot either afford to pay the loss or your current policy does not meet the limit they are asking for.

Excess insurance is particularly important for ensuring financial stability in the face of large, unforeseen expenses or catastrophic events that exceed the capacity of standard insurance policies.

‍

‍

Not having excess (XS) water damage insurance as a condo owner, especially if your current policy does not cover the Strata's deductible, can lead to significant financial and legal consequences. In such a scenario, if a water damage incident occurs and the cost exceeds the limit of your current policy, you would be personally responsible for paying the difference. This could amount to a substantial financial burden, especially considering the high deductibles often set by Strata corporations.

In condo complexes, where damages in one unit can affect other units and common areas, the responsibility for damages can become complicated. For example, if there’s a leak in one unit that causes damage to another unit below, and the Strata's deductible is high, the unit owner suffering the damage may have to cover their own damages through their unit-owner’s policy if they don't have adequate coverage​​.

See Water Damage: Loss Prevention & Coverage while Living in a Condo

Moreover, water damage is a common cause of loss for condo owners, and the financial consequences can be difficult, especially when it affects other units and common areas. Being unprepared for such a leak can lead to costly repairs and property damage. In these cases, the Strata Bylaws might hold the responsible unit owner accountable to pay the Building Insurance Deductible for any water losses originating from their unit and damaging common property. If a condo owner does not have adequate insurance coverage, this could result in a situation where their personal assets are at risk if other affected owners decide to sue for damages​​.

‍

‍