A lot of people don’t realize that any material change requires that the insurance company be notified. This needs to be completed within 30 days of the change, otherwise the insurance contract is void (ie. won’t respond if you have a claim). No-one would ever want to be put in that situation, so let’s look a bit closer at the definition of material change so we can understand how changes can impact the insurance policy.
A material change is defined as “a substantial and continuing change to your situation that affects and increases the risk involved to insure your property.”
Occupancy changes are a common type of material change that condo owners would see. Here are some important occupancies with brief explanations; each may change the way your insurance company would view your condo. These occupancy types could result in different forms needing to be signed, different insurance limits provided and/or may even require you to go to a different policy more specific to that type of condo occupancy (ex. AirBNB is far different than just an Owner living in his condo).
- Owner Occupied – as it sounds. This is the most desirable condo occupancy type (best coverage would be available).
- Secondary location – used by the owner during the week while working in a different town and coming to primary home during weekends. This often provides similar coverage as owner occupied primary condo residence and saves on rent/hotel bills.
- Family Occupied – parents may purchase one for their children to live at while attending post secondary institutions. This saves on rent and provides coverage to the occupying family members’ contents/liability.
- Rented Condo – renting long term to a tenant and/or family on a yearly lease. This situation typically provides lower automatic limits of coverage, but coverage usually remains similar to owner occupied.
- Rented Condo – renting short term. This would be like an air BNB, so more on a daily or weekly basis. This is considered more as a business venture and requires a specialty insurance policy.
- Renting to students – often near post secondary locations, we find condos are rented to students. If there are over 3 different families in one condo unit, it may be considered a rooming and boarding risk. It is important to disclose how many people plan to be in the one condo unit.
- Vacant Condos – just as it sounds, no one is there. The property could possibly be up for sale or between renters/occupants. Typically, there are exclusions to some type of claims.
If you are uncertain as to how your policy is set up, it’s much better to discuss prior to a claim happening. Make sure to review with your broker at any time to discuss your specific scenario. Reach out to your Swift Digital Insurance broker today at 1-833-277-9438 or by email at firstname.lastname@example.org