Every condominium insurance policy starts here: fire and natural perils. This is the core of the cover that protects the very existence of the building – against the rare but existential losses that no community's budget could absorb. Precisely because we call it the “base”, we tend to skim past it; yet the content of the base cover differs from quote to quote, and the differences would come to light on the worst possible day.
- The base cover typically includes fire, explosion, lightning and storm damage, plus further natural perils, on the commonly owned parts of the building.
- “Natural peril” is not a single concept but a list – with different content and different conditions in every quote.
- Large losses are where the sum insured really bites: an underinsured building meets proportional settlement at the worst possible moment.
What does fire cover include?
Fire is the original insured peril: besides damage from flames, explosion and the direct effects of a lightning strike typically belong here, and in many policy terms the secondary, power-surge type effects of lightning as well – the latter often as a separate add-on. In a condominium, fire cover applies to the commonly owned structure: load-bearing walls, floor slabs, the roof, the stairwell, the common areas. An important nuance is how far the incidental costs after a fire – firefighting, demolition, clearing the debris – are paid: that is set out in the cost-reimbursement rules of the policy terms.
From storm to snow load: the natural perils list
Behind the collective term “natural perils” there is a list: storm, hail, snow load, flash flooding from heavy rain, landslide, rockfall and earth slip, the collapse of an unknown cavity, impact by a third party's vehicle and their peers. The list and the definitions differ from quote to quote – wind, for example, typically counts as a storm only above a defined wind speed. So when I compare, the question is not “is there natural perils cover”, but exactly what is on the list and on what conditions. The practical side of storm damage has its own article: storm damage and roof leaks.
Where the base cover ends
It is worth seeing the boundaries in two directions. On one side there are risks that are typically not part of the base cover but can be requested separately, as add-ons with their own rules – which is why earthquake and flood have their own, honest article. On the other side there are the exclusions: damage arising from a failure to maintain, events during construction or demolition works, and war damage usually fall outside the cover; for deliberate damage, the insurer is exempted from payment. For reading the exclusion list: the policy terms crash course.
The real question in large losses: the sum
With fire and natural perils the stake is typically not a small repair bill but an amount that can run to the cost of rebuilding – this is where it turns out whether the sum insured was properly sized. If the building was insured below its true rebuild value, the insurer may apply proportional settlement, and the shortfall would bite exactly when the trouble is greatest. So the real maintenance of the base cover depends not on the risk list but on value maintenance.
What can the building do?
Three things: know its own list (what is covered and what is not), keep the sum up to date at each renewal date, and take prevention seriously – the condition of the chimneys, the electrical system and the roof are the most everyday factors in fire and storm risk. A ready-made list for prevention: loss prevention in the building.
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