What if your neighbour causes water damage to your condo?

Condo living is appealing for many people. Mowing the lawn? Fixing the furnace? Cleaning the outdoor windows? Not your concern.  

However, one drawback is living in close quarters with your neighbours. You never know when the unit above you might have an overflowing sink or broken pipe that can lead to damage in your unit.  

If the worst happens, there’s a good chance your condo insurance will help cover your losses — but there are some things to keep in mind. 

Does condo insurance cover water damage? 

The good news is that most water damage is covered in standard condo insurance policies. Typically, this means you will be covered for what is called water escape and rupture — essentially if a pipe were to break. So, if your neighbour's toilet suddenly flooded and leaked into your unit, you’d be covered for those damages.  

When it comes to exterior perils, freezing and ice back up are also covered. Many insurance companies offer additional, optional coverage for sewage backup or flooding in the unit. You can choose to add this for an additional fee. 

How common is water damage? 

Many condos in Canada have been built within the last twenty years. With new construction standards, do you really have to worry about water damage? In short: yes. 

“Water damage is the most common type of loss that we encounter, whether it’s an overflowing sink or toilet, a burst pipe, sewer back up, or flooding,” says Michelle Laidlaw, associate vice president of national home product at Co-operators. “These can occur in any building regardless of age.” 

What if I have a negligent neighbour who has not fixed a water leak? 

An important thing to keep in mind is that there is a big difference between a sudden discharge of water — the kind caused by a burst pipe or flooding — and gradual leakage. Most insurance companies have a leakage exclusion.  

The idea is that if you are keeping your home in good order, the water damage should be noticed, even if it was coming from another unit.  

Laidlaw notes it also matters more where the water originated from and how it was discharged. 

“For example, if your neighbour loves to take baths but leaves the water running and the tub overflows, the resulting water damage to your unit would be covered,” she says. 

Can I hold my neighbour liable for their negligence? 

You can potentially hold a neighbour liable if it can be proved that they were in fact negligent.  

It would mean proving that the leak happened because your neighbour was not adequately taking care of their home.  

In 2019, a British Columbia civil court ruled against condo owners suing their neighbour for the cost of their deductible after their unit sustained water damage because of a toilet leak. The judge said that the owner of the unit with the faulty toilet did not behave negligently since he called the building manager who got it fixed. But if no action was taken, they may have had a case against the neighbour. 

Does being a renter or an owner make a difference? 

According to Laidlaw, all Canadians, whether they rent or own, should make sure they are covered in the event of burst pipes or flooding. But your priorities will be different. 

“The owner of the condo is most likely concerned about the physical damage to the unit,” says Laidlaw. “The renter would be concerned about their personal property and any improvements and betterments they may have made to the unit since their occupancy.”  

Renters can also buy additional insurance to protect their personal property in the event of flooding and sewage backup. 

If you’re interested in updating your policy with added coverage for water damage, be sure to compare condo insurance rates and tenant insurance rates before purchasing.