Recent reports from the Condominium Home Owners Association of BC are announcing strata owners in BC are facing insurance rate increases of between 50 and 300 per cent this year, while deductibles are going from the conventional $10,000 or $25,000 to $100,000, $250,000 or $500,000.
Strata building insurance premiums are increasing for a variety of reasons, including sky-high property prices, natural stressors like wildfires and flooding, an increase in the number of claims, the cost of repairs, and the growing number of strata developments. Many condominiums were built in the 1970s and ’80s, and the cost to maintain these buildings is increasing with time. These effects are compounded by a lack of insurance providers willing to take on risk.
As a result, many owners in British Columbia could see a hike in their strata fees and homeowner insurance rates.
So what can you do to minimize the financial stress of insurance rates and mitigate your risk?
Strata Owners: ask your strata corporation or manager for a copy of the corporation’s certificate of insurance.
This document details your strata’s deductible amounts. You can show a copy of the certificate of insurance to your insurance provider to understand what your liability would be if the insurance doesn’t cover the deductible in the event of an emergency.
As a strata property owner, there are other measures you can take to ensure you have sufficient coverage:
- Protect yourself with a unit owner’s insurance policy
- Cover a loss in your unit with a policy that covers the higher deductible (insurance deductible insurance)
- Take risk-preventative measures in units and on common property. These can include smoking bans, limits on balcony barbecues, and covering fire sprinklers with protective cages.
Unlike strata owners, prospective home buyers are typically not entitled to a copy of the insurance policy, as this is a privacy issue. However, potential homeowners need to determine their potential financial risk before investing in a strata.
Fortunately, there are two options available, even if you’re not yet a member of the strata.
- Request a Form B Information Certificate.
The depreciation report is a valuable document to review future major maintenance and renewal cycles on items like doors and windows, the roof, exterior fixtures, elevators, and plumbing. You can then compare the balances in the contingency fund with future demands on funds by the corporation and evaluate your risk.
- Have your agent contact their agent for homeowner documentation.
To obtain them as a potential homeowner, have your agent submit a request for the specific documents through the seller’s agent. There are no privacy restrictions that apply to those items, and the strata must retain and make them available on request to the owner or their agent.
When you obtain a copy of the insurance policy, review the deductible amounts and other types of claims.
Consult Your REALTOR®