Impacts of B.C. Condo Insurance Increases

Impacts of B.C. Condo Insurance Increases

The news is full of dire warnings about condo insurance of late and I’ve been receiving calls from people who are concerned, so I think this topic needs to be addressed.

What’s Happening at Maija London?

The Vancouver Sun ran an article entitled “B.C. stratas on edge after reports of soaring insurance premiums” and it talks about how condos across B.C. could be hit by soaring insurance bills this year, a New Westminster strata council president is warning. Note “could be”.

Not to make light of what is a very real concern many condo owners are facing; especially owners of older condos, I’m happy to inform you Maija London is in an excellent position to weather the concern.

Maija London’s insurance is in place with very little increase, as will be reported in the upcoming Strata AGM. Because it is new and was constructed by a diligent builder, it is up to date on the latest building code improvements, and that’s a very important consideration with insurance adjusters.

What’s Happening in B.C.?

After receiving around one hundred distress calls from stratas across B.C., the Insurance Bureau of Canada, a national industry association, the B.C. Ministry of Finance launched a task force to review the issue across Canada, and will meet next month with affected groups in B.C. including the B.C. Ministry of Finance.

“While specific product pricing is a matter for the insurance industry, we are working with the British Columbia Financial Service Authority to monitor the situation carefully and ensure we are doing everything we can to financially protect British Columbians,” said Finance Minister Carol James.

Last week the Insurance Brokers Association of B.C. (IBABC) called for consultation among all key stakeholders to discuss owner liability in condo corporations, with a focus on proposed legislative action. IBABC recommend two key reforms to the Strata Property Act:

  • A $50,000 cap on loss assessments (which may not apply in cases involving negligence).
  • The addition of a standard definition of a strata unit.

The lack of a or “standard unit definition” in B.C.’s Strata Property Act often complicates deductibles and coverage, and a “bare-bones” definition would encompass the structural components of the unit, such as walls, ceilings, drywall, sub-floor, basic electrical, plumbing and some HVAC components, including the requirement to meet applicable fire and building codes. It would not include most finished items, such as floor finishing, carpets, countertops, plumbing fixtures, appliances, and any upgrades.

Additional Ways to Protect Your Investment

Consider acquiring condo unit owner’s insurance. Condo insurance isn’t mandatory in most buildings (yet), but it’s a type of coverage that can be invaluable if you’re a condo owner facing potential expenses. If there is loss in the building and the strata's insurance doesn't cover all costs, unit owners are responsible for the difference. You could even be responsible to pay the deductible on the strata's policy if, say, a flood occurs from your suite, even if it wasn’t your fault. Loss assessment coverage is available to pay these expenses for as little as $20 to $40 per month and is worth the peace of mind. Such insurance would also provide coverage for your personal belongings within your unit as well as any enhancements you make, such as floor covering updates, new or additional built-in closets, cabinetry or countertops.

New Measures our Builder is Taking

Water damage seems to be a big issue from washers, dishwashers and hot water tanks. In the future, the builder of Miaja London will be installing house hot water with boilers in the basement of condo complexes to help ameliorate some of the risks associated with water.

It’s important to remember the current situation with condo insurance is a moving target with many players actively involved who are highly motivated to stabilize the current crisis. Yes, there will be more costs associated with owning a condominium, but you can be confident of your purchase of a new condominium at Maija London.

If you have more questions about this, please feel free to contact me.

Chuck Meagher

MLS® property information is provided under copyright© by the Vancouver Island Real Estate Board and Victoria Real Estate Board. The information is from sources deemed reliable, but should not be relied upon without independent verification.