Year in Review: What happened with strata condo insurance in 2023 in British Columbia?
In 2023, British Columbia experienced significant changes in strata condo insurance. The cost of strata insurance has increased, leading to rising strata insurance rates and higher deductibles for strata corporations. To address these challenges, the B.C. government implemented changes to strata regulations, including an increase in the minimum Contingency Reserve Fund (CRF) contribution amount per year to 10% of a strata's annual operating expenses, up from the previous 5% requirement[1]. The rise in strata insurance fees was attributed to various factors such as harmful weather conditions, expensive re-builds due to earthquakes, and higher claims, leading to increased premiums[2]. These changes have impacted strata owners, who are advised to purchase separate insurance to protect themselves and cover the strata corporation's insurance deductible, which can range from $25,000 to $100,000 or more[3]. The Insurance Brokers Association of BC (IBABC) has proposed solutions to improve strata insurance fees, including a $50,000 cap on loss assessment to mitigate the risk to unit owners' financial security[4]. Overall, the strata condo insurance landscape in British Columbia in 2023 was characterized by rising costs and regulatory changes aimed at addressing the affordability and availability of insurance for strata corporations and owners.
How is Strata Insurance Priced?
Strata insurance pricing is set by insurance companies (insurers) that underwrite the strata property. In British Columbia, the cost of strata insurance is determined by various factors, including the property's location, age, and condition, as well as the claims history of the strata corporation. Additionally, the Insurance Bureau of Canada and the federal government are discussing the reasons for the increase in insurance rates, which include an increase in the number of claims and the cost of re-construction. Strata corporations can help minimize premium hikes through better risk management, such as implementing common-sense guidelines to improve risk, addressing water issues, and maintaining a strong cash cushion to demonstrate fiscal responsibility to insurers. It's important for strata owners to understand the factors that influence insurance rates and to work with insurance agents to determine their coverage needs.
Further reading:
https://www.pazderlaw.com/strata-corporation-insurance-issues-controlling-the-cost-of-premiums/
https://www.insurancecouncilofbc.com/consumer-information/consumer-advice/strata-insurance-policies/
https://www.rebgv.org/content/rebgv-org/news-archive/what-you-need-to-know-about-strata-insurance-rate-increases.html
https://www2.gov.bc.ca/gov/content/housing-tenancy/strata-housing/operating-a-strata/finances-and-insurance/insurance
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Dive into the essentials of strata water deductible coverage. Our comprehensive guide simplifies this crucial aspect of residential insurance, helping you navigate and optimize your policy for maximum protection.
Who pays strata insurance deductible?
In the case where the strata's water damage deductibles are very high, the strata will typically impose a bylaw requiring the 'at fault' unit owner pay the entire insurance deductible. Since sharing the cost of the deductible could be significant, most stratas will deem it unfair to punish innocent owners, the cost is passed onto the owner who causes the loss. It is important for every owner living in a strata to fully understand the implications of causing an insurance claim requiring the building's policy to act.
What is strata water damage deductible insurance and how does it work?
Strata deductible insurance helps pay your portion of the strata corporation's master building policy following a catastrophic event.