"The Act of God designation on all insurance policies means, roughly, that you cannot be insured for the accidents that are most likely to happen to you."  ~Alan Coren
 
While the quote above might have the ring of truth to it, I'm still really grateful for insurance. I have to admit, I've done some dumb things in my life - like the time I moved into an older house and decided to renovate the basement. After a couple of days of installing some beautiful laminate floors myself, and finally fitting the last jigsaw piece into place, I decided to treat myself to a cold beer after I threw in a load of laundry. It was a hot day, and I can tell you there was a great sense of satisfaction in completing that task, and that cold beer tasted better than you might imagine.

But to my horror, when I returned to admire my work, I found my new floating laminate floor was literally floating - in about an inch-and-a-half of grey water. It seems the previous occupants had moved the washing machine and forgot to reconnect the discharge hose. This caused all the dirty, soapy water to spew out over the floor, not only ruining my hard work but causing water to wick up 6 inches of wall space. Thank goodness for insurance: the clean-up bill exceeded $30,000.

Owning a condo in a distant city provides some unique challenges. One of them is making sure some natural (or not-so-natural) disaster won't render your investment cash-flow-negative. I'm not an insurance expert, but I can tell you from experience that there are a few must-have coverages for any condo. While most policies cover a building's basic structure and common areas, the following coverages should not be overlooked: 
 
1.) Coverage for any additions or alterations 
 
Sooner or later we all make changes to our investment condos. It might be that the carpet shows some wear, or the kitchen cabinets go out of style. In some cases, the condo association's insurance policy will cover damage to these items if they were installed by the original developer, but rarely if they've been upgraded or modified. There was a day when insurance companies would cover such things. They'd install something similar to what was there when the building was new. But recent insurance claims involving buildings that are remediated (rebuilt) have left the owner with no flooring - or worse, with no interior fixtures. In most cases this can be prevented by buying a condo owner's insurance package, which covers not only your personal belongings, but also any upgrades to the condo. 
 
2.) Water escapement coverage 
 
Chances are after reading my story, you won't be firing up any appliances before checking the connections, but consider the possibility of a washing machine hose bursting, or a dishwasher seal leaking. These are everyday occurrences that can not only damage your suite but can wreak havoc on numerous condos below and to the side of yours. Don't forget to check your general policy to make sure it includes this very important coverage. It also makes good sense to upgrade washing machine hoses from rubber to braided metal, as metal hoses rarely burst. 
 
3.) Deductible insurance 
 
These days condo insurance claims are on the rise, and most condo associations are experiencing higher deductibles at the time they renew their building coverage. While you may well be covered for damage done by an overflowing sink or other "at-fault" claim, the deductible could be huge. I've seen several buildings with deductibles as high as $50,000 and $100,000. Solution? Buy coverage that will take care of most or all of the deductible. Doing so is usually surprisingly inexpensive. 
 
So far I've never been caught with a claim I didn't have coverage for. My luck is due to the fact that I work with excellent insurance salespeople, but there's an even more important reason: I always ask plenty of questions and never overlook the fine print and exclusions in a policy I'm considering.

While most rental property insurance packages have standard umbrella liability that covers many things, it often doesn't cover local issues. Be especially careful to make sure your coverage for earthquake, fire, and flood does not exclude properties in your neighbourhood.This is where a local insurance broker has a big advantage over a large national provider in getting you the right coverage. The local broker knows the local issues.