There has been a spate of extreme news headlines (see below) as of late creating a lot of fear around what is happening with condo insurance in BC. The media is really highlighting worst case scenarios causing panic as strata corporations attempt to navigate this new territory. There are some significant and impactful changes on the horizon that strata owners, investors and strata corporations should be aware of. I hope to shed a little bit of light on what is happening, but I am in no way providing insurance advice; please reach out to your broker or contact me if you need a referral to good insurance broker. 
Let’s talk about what is driving this change.
Frequency in water losses, severe fire and weather-related losses are resulting in insurers paying out more than they collect in premiums. Our local market is also impacted by global losses. There has also been an increased focus on catastrophic events like earthquakes, floods and wild fires. Lastly, some insurers are leaving the strata insurance market completely. This results in a capacity crisis which inevitably drives premiums and deductibles up.
What we are seeing.
Strata corporations can expect to see these issues translate into a 25%+ increase in insurance costs moving forward. If a building has experienced losses (flood, fire, damage), I have heard anywhere from 50%-300%. Deductibles have also increased substantially, from $25,000 per claim to as high as $250,000 to $500,000 in extreme cases. High-rise condo towers, buildings with multiple loss claims and buildings that have deferred maintenance seem to be impacted the most right now.
What you can do.
It’s important to understand your buildings bylaws to see how claims are dealt with. Some strata corporations make the owners strictly liable for any losses that originated from their units. For example, if you cause a flood and the water damages other units and common areas, you could be on the hook for your deductible along with the strata corporations deductible. Your insurance agent should be able to let you know if your homeowner policy covers you. You might also anticipate your strata fees increasing this year as councils adjust annual budgets to cover more costly policies. Building policies depend on a few factors like age, maintenance, costs to re-build, etc. Above all, it’s imperative to reach out to your insurance professional to get some advice on your coverages. This is a complicated issue and I see this being a bit of a fluid situation over the next year and will be watching closely. Happy to connect anytime to provide referrals or chat! Feel free to contact me. Resources for BC home owners: Condominium Home Owners Association of BC BC Housing Branch Guide to Strata Housing
