What if your neighbour causes water damage to your condo?

This article has been updated from a previous version. 

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?  

Water damage is one of the most common concerns for condo owners. The good news? Most standard condo insurance policies cover it, but there are a few details you should know. 

Most condo insurance policies include coverage for water escape and rupture. This means you're protected if, for example, a pipe bursts in your unit or if your neighbor’s overflowing toilet damages your walls and floors. These scenarios fall under interior water damage, which is almost always part of your standard coverage. 

On the exterior side, you're often protected against freezing and ice backup. If ice causes damage to your walls, ceilings, or other parts of your unit, your policy generally has you covered. 

Read more: Protect your home from water damage, and save on insurance in the process 

What about optional coverage? 

Sometimes, standard coverage isn’t quite enough. Here are optional add-ons you might want to consider: 

• Sewage backup 
  Protects against damage caused when sewage systems back up into your unit. This can prevent you from facing high repair costs after severe weather or drainage issues. 

• Overland flooding 
  Coverage in case heavy rains or melting snow causes water to seep into your unit from the ground level. Not all policies include this, so it’s worth looking into. 

These additional protections come with an added fee, but they can save you thousands in costly repairs down the line. 

Related: Three home insurance endorsements to consider based on where you live 

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.”  

The numbers confirm it. In 2024 alone, water damage was one of the top reasons for home insurance claims in Canada, with flooding alone contributing to over $1 billion in losses, according to the Insurance Bureau of Canada (IBC). This shows just how essential it is for condo owners to understand their coverage and plan accordingly. 

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

Dealing with a negligent neighbor who hasn’t addressed a water leak can be frustrating—and costly. It’s important to understand how insurance factors into these situations. 

First, there’s a key difference between sudden water discharge, like a burst pipe or flooding, and gradual leakage. Most insurance policies exclude coverage for damage caused by slow, unnoticed leaks. This is because insurers assume regular maintenance and inspections should catch these issues, even if the source is another unit. 

Laidlaw notes that the source and cause of the water matter significantly, explaining that “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.” 

However, ongoing leaks are another story and often require proactive steps to resolve before they lead to major damage. 

If you suspect a neighbor’s negligence is causing water damage, act quickly—document the damage, notify your condo board, and contact your insurer to clarify what’s covered under your policy. 

Can I hold my neighbour liable for their negligence?  

You can hold a neighbor responsible for damage if you can prove they didn't take care of their home properly, causing damage to your unit. 

For example, in 2019, a court in British Columbia ruled on a case where condo owners wanted their neighbor to pay for their insurance deductible after water damage from a leaking toilet. The court decided the neighbor wasn't at fault because they quickly contacted the building manager to fix the issue. The decision might have been different if the neighbor had ignored the problem. 

To make a case, you need evidence showing your neighbor's lack of action or care directly caused the damage. These situations can be complicated, so it's a good idea to talk to your condo board and get legal advice if you think your neighbor was negligent. 

Learn more: Who pays when it comes to damage from renters? 

Does being a renter or an owner make a difference?  

Whether you rent or own a condo, having the right water damage coverage is important. But your concerns and priorities might 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 add extra coverage for risks like flooding or sewer backup to protect their belongings. 

Be prepared before the worst happens 

Water damage can be costly and disruptive, but the right preparation makes all the difference. 

Here are some quick tips to stay ahead of potential problems: 

• Review your current condo or tenant insurance policy to understand what’s covered. 
• Explore optional add-ons like sewage backup or overland flooding if they suit your needs. 
• Keep an open line of communication with your condo board about any maintenance concerns. 
• If you suspect a neighbor’s negligence, act quickly—document everything and notify the proper authorities. 

 If you're thinking about updating your policy, compare condo or tenant insurance rates to find the best coverage for your needs. Peace of mind comes from being prepared. 

Read more: What factors affect tenant insurance?