The condominium market in British Columbia appears to be facing an insurance crisis, with some strata corporations witnessing a huge jump in premiums while others are unable to secure a renewal.
According to the Insurance Brokers Association of BC (IBABC), strata corporations are facing drastic changes in insurance deductibles and premiums.
For instance, IBABC said there are renewal premium increases from between 50% and 400% and deductible increases from $25,000 per claim to $250,000 and up to $750,000.
Some strata corporations that are renewing their policies are required to have it for a full replacement cost, while others are struggling to find a comprehensive coverage.
Troy Wotherspoon, president at IBABC, said these changes are putting strata corporations and unit owners in a vulnerable position.
“Higher premiums and higher deductibles increase the burden on the unit owners. They are likely looking at increased strata fees to cover the big jump in strata building insurance premiums,” he said.
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Given these challenges, IBABC is recommending two key reforms to the Strata Property Act, including a $50,000 cap on loss assessments and the addition of a standard definition of a strata unit.
While these two recommendations are not expected to address the rising strata-building premiums and deductibles directly, IBABC said these would be able to protect strata unit owners from further risks of losing their homes and would likely help mitigate future insurance market cycles.
“Having a legislated standard unit definition would greatly clarify the responsibilities of strata building insurers via their offered insurance policies versus the responsibilities of strata unit owners and their insurance responsibilities,” IBABC said in a statement.
