Condo Water Damage: What’s Your Responsibility?

Whether it’s a leaky pipe under your sink or a neighbour’s toilet overflowing, water damage can happen when you least expect it. And if you live in a condominium, it’s not always clear who’s responsible for what. 

Condo insurance policies can be confusing, and misunderstandings can lead to thousands of dollars in unexpected costs. In this article, we’ll break down what you need to know about condo water damage responsibility—what falls to you, what falls to your condo association, and how to protect yourself with the right coverage. 

Pipes, sinks, toilets, and other water-related fixtures are more densely concentrated in condominiums than in single-family homes. With more units and more people using water daily, the chances of something going wrong naturally increase. 

Shared infrastructure also raises the risk. If one unit experiences a leak or a burst pipe, the damage can quickly spread to neighbouring units, making it harder to contain and more expensive to repair. 

Water damage is one of the leading causes of insurance claims in Canada. According to the Insurance Bureau of Canada, insured losses for water damage average $1 billion annually. 2024 was the worst year in Canadian history, with over $4.1 billion in insured losses. It's clear that condo water damage is a big risk, one that's amplified by the complexity of shared infrastructure and overlapping responsibilities, so making sure that you have an understanding of your insurance policies is essential. 

When you live in a condo, two main types of insurance policies may apply: the master insurance policy and your personal condo insurance policy.  

The master policy, also known as condominium association or corporation insurance, is held by the condo association and typically funded through your condo fees. Because condo ownership involves shared spaces and responsibilities, this policy helps protect all unit owners from risks affecting the building as a whole. The exact coverage can vary by building, but there are generally two types: 

• Bare walls: This only covers the structure of the building and common areas such as roofs, exterior walls, stairways, elevators, hallways, and grounds. Nothing inside your unit is covered.
• All-inclusive (or all-in): This covers the structure of the entire building, common areas, and fixtures in your unit, such as cabinets, flooring, and certain appliances. 

While personal condo insurance is not mandatory in Canada, it’s strongly recommended. Unlike traditional homeowners, condo owners share ownership of the building but are fully responsible for what’s inside their unit. Personal condo insurance helps cover: 

• Personal property: Furniture, electronics, clothing, and other belongings.
• Improvements: Renovations or upgrades you’ve made to your unit.
• Personal liability: Medical or legal costs if someone is injured in your unit or if you accidentally cause damage to another unit. 

Understanding standard unit by-laws is also key. These by-laws define what is considered part of the original unit versus an upgrade, which plays a role in determining who is responsible for covering damage or repairs. 

Depending on provincial regulations and your condo corporation’s by-laws, responsibility for insurable losses can vary. Be sure to review your documents regularly. If you’re unsure of anything, a Surex advisor can help you make sense of it. 

Burst pipes, plumbing leaks, and flooding are among the most common causes of water damage in condominiums. But when it happens, who pays? 

The answer depends on several factors, including the source of the water, the location of the damage, and the terms of your condo corporation’s insurance policy. In general, understanding the difference between your personal condo insurance and the building’s master policy can help determine who is responsible for the costs. 

Causes 

• Freezing temperatures
• High water pressure
• Corrosion or pipe age
• Clogs and blockages
• Ground movement from earthquakes or construction 

Who is responsible? 

• If the pipe was inside your personal unit, then the damage is typically your responsibility.
• If the pipe bursts in a common area or inside a shared wall, the condo corporation is responsible.  

How does insurance help? 

• Individual insurance can cover damage to the interior or to any personal belongings.
• A standard master policy can typically cover pipe repairs and structural damage

Causes 

• Older pipes
• High water pressure
• Loose connections 

Who is responsible? 

• If the leak is coming from one of your own appliances or fixtures, then it’s usually your responsibility.
• If the damages are a result of a neighbouring unit leaking, liability may fall on the respective unit owner if they are found to be at fault. 

How does insurance help? 

• Individual condo insurance can cover water leak damage, including the interior and any personal belongings.
• Unless the leak involves common systems, a master policy is unlikely to apply. 

Causes 

• External flooding: Heavy rainfall, storm surges, rapid snowmelt
• Internal flooding: Overflowing appliances, broken pipes, plumbing failure 

Who is responsible? 

• In the case of personal appliance failure, you will be responsible for handling the damage.
• If the flooding was a result of shared-area failure, such as faulty sump pumps or drainage systems, the condo corporation is responsible.  

How does insurance help? 

• For internal flooding, individual insurance can cover damage to the interior and personal belongings.
• External flooding is not covered by most standard policies, but additional coverages such as overland water or sewer backup can offer greater protection.
• The master policy may still apply in the event of a building-level failure. 

If you’re dealing with water damage in your condo, it’s important to act quickly. Delaying your response can make the damage worse and may even result in a denied insurance claim. Here’s what to do:  

• Turn off water sources: Minimize further damage by shutting off all water sources as soon as possible.
   
• Document the damage: Take clear photos or videos of all affected areas and items right away.
   
• Notify all relevant parties: Inform your property manager or condo board and let your insurance provider know about the damage immediately.
   
• Track all communications: Keep a record of emails, phone calls, and written notices in case any disputes arise during the claims process. 

Don’t let water damage catch you off guard. Use this checklist to stay prepared and reduce your risk.

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Condo owners face a unique set of challenges when it comes to insurance, especially with shared spaces and overlapping responsibilities. Water damage is one of the most common issues in condominium living, and it’s not always clear what’s covered under your policy. Taking the time to understand your coverage now can help prevent confusion later and give you a clearer path forward if something goes wrong.

Learn more about condo insurance or find the best insurance rates by starting a quote today.