You just bought an investment condo and thought you don't need to get the condo insured since "insurance" is included in the maintenance fees. There are 4 reasons why every real estate investor needs to get their investment condo insured.
1. Condo Building Insurance
The building insurance included in the maintenance fees covers the shell of your investment condo; the hallways, elevators, lobby, gym, party room, liability if anyone falls and sues the condo building but it doesn't not cover the insides of the condo, such as any upgrades made to the condo or contents. The investment condo insurance policy covers what's inside the condo and its contents such as belongings and personal items
Let's say you're at work and you come home to find out your washing machine leaked water which damaged the neighbours condo and the hallway. Your investment condo insurance will cover the cost of repairs made to your neighbour's condo and the hallway
One item the lawyer will review in the status certificate is the building insurance policy deductible. For example, if the building insurance's deductible is $10,000 and your investment condo policy's deductible is $1000. Your policy will cover the shortfall if necessary, ie. the $9000. You will only pay $1000.
4. Rental income
In cases where there is damage in your condo and the tenant has to move out, your insurance policy would have a rental income loss provision and pay you the rents for the period of time the tenant is out of the condo. This will protect your cash flow during the repairs period of time.
Consult with an insurance broker who specializes in working with real estate investors to protect your investment condo.