{"id":14945,"date":"2020-02-27T11:11:00","date_gmt":"2020-02-27T19:11:00","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=14945"},"modified":"2020-02-19T10:12:46","modified_gmt":"2020-02-19T18:12:46","slug":"condo-buildings-skyrocketing-insurance-crisis","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2020\/02\/condo-buildings-skyrocketing-insurance-crisis\/","title":{"rendered":"Condo Buildings Skyrocketing Insurance Crisis"},"content":{"rendered":"<p style=\"text-align: justify;\">Insurance costs for strata corporations have been skyrocketing in condo-heavy markets such as Vancouver, Toronto and New York, while some buildings have been told flat out their insurance will not be renewed.<\/p>\n<p style=\"text-align: justify;\">\u201cWe\u2019ve been surprised at the number of strata corporations seeing increases of between 40% and 60%, but we won\u2019t really know how many will be affected until we\u2019ve had a whole year of this,\u201d said Tony Gioventu, executive director of the Condominium Home Owners\u2019 Association of BC \u201cEveryone won\u2019t have the same extreme increases in insurance costs or deductibles, but I think it will affect everyone.\u201d<\/p>\n<p style=\"text-align: justify;\">The Insurance Brokers Association of BC said it has seen premium increases ranging from 50% to 400% for stratas, and deductibles of $25,000 per claim increasing to between $250,000 and $500,000.<\/p>\n<p style=\"text-align: justify;\">Gioventu said there are 30,000 strata corporations in BC and every month, as many as 2,000 have to renew their insurance. When they do, the association hears about it, especially when the insurance costs have doubled or tripled.<\/p>\n<p style=\"text-align: justify;\">So far this year, hundreds have reported facing massive increases, he said, while 11 learned their insurance would not be renewed at all.<\/p>\n<p style=\"text-align: justify;\">Strata corporations must insure for full replacement value of all common property, common assets and fixtures.<\/p>\n<p style=\"text-align: justify;\">Most of the reports about big increases so far have come from buildings in the Lower Mainland, Gioventu said.<\/p>\n<p style=\"text-align: justify;\">\u201cWe haven\u2019t seen the same increases [in Victoria], but I will qualify that by saying \u2018yet,\u2019 \u201d he said. \u201cI expect in a month or two, we will get the same cries from Victoria.\u201d<\/p>\n<p style=\"text-align: justify;\">Sandy Wagner, president of the Vancouver Island Strata Owners Association, said while they\u2019ve had plenty of queries from members, so far they haven\u2019t heard of any \u201castronomical increases\u201d \u2014 possibly because there are fewer high-rise stratas on the Island.<\/p>\n<p style=\"text-align: justify;\">Multiple factors appear to be behind the increases. They range from fewer insurers being able to take on more risk to aging buildings that in some cases haven\u2019t been well maintained, expensive new construction, expensive high-end finishing in those new units and an increase in the number of high-rise developments.<\/p>\n<p style=\"text-align: justify;\">Gioventu said some new buildings have been hard hit because the cost of building replacement and finishings is so high.<\/p>\n<p style=\"text-align: justify;\">That\u2019s especially true of high-rises where a common problem such as water damage tends to affect multiple floors, inflating any claim.<\/p>\n<p style=\"text-align: justify;\">\u201cThere have been new buildings that have just come on the market where the owner-developer had estimated $300,000 for insurance in the first year and just found out it will be $1.5 million,\u201d he said.<\/p>\n<p style=\"text-align: justify;\">\u201cNow, within a year of moving in, [new owners] are facing strata fees that are now $300 to $400 higher per month.\u201d<\/p>\n<p style=\"text-align: justify;\">Wagner said they\u2019ve been told that strata insurance has been underpriced for years and the industry is looking to recoup its losses.<\/p>\n<p style=\"text-align: justify;\">\u201cCurrently, insurers are paying out more in claims than they are taking in premiums and so they are passing it along,\u201d she said. \u201cThe very high premium increases of 40% or more are mostly directed to stratas with multiple claims, and most specifically water claims.\u201d<\/p>\n<p style=\"text-align: justify;\">Stratas that are meeting their repair and maintenance obligations are seeing the smallest increases, she said.<\/p>\n<p style=\"text-align: justify;\">Tara Paddon, managing director of strata property management for Pemberton Holmes, said the company has seen some significant insurance increases, mainly in larger stratas, and those that have previously filed significant claims.<\/p>\n<p style=\"text-align: justify;\">The buildings most susceptible to massive increases appear to be new high-rises, large resort complexes, any strata with more than 300 units and buildings that have not been well maintained.<\/p>\n<p style=\"text-align: justify;\">To help deal with the issue, the Insurance Brokers Association of BC is suggesting that limits be placed on what\u2019s covered by a strata\u2019s insurance.<\/p>\n<p style=\"text-align: justify;\">For example, a definition for a \u201cstandard unit\u201d could include items such as walls, ceilings, drywall, sub-floor, basic electrical, plumbing and some heating, ventilation and air-conditioning components, but not finishing items such as flooring, countertops, fixtures, appliances and upgrades.<\/p>\n<p style=\"text-align: justify;\">Gioventu suggested changes to the building code to address problem areas \u2014 a requirement for floor drains near water systems, for example \u2014 or legislation to limit the risks stratas are exposed to.<\/p>\n<p style=\"text-align: justify;\">\u201cBut there is no quick fix to this,\u201d he said.<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/biv.com\/article\/2020\/02\/condo-buildings-face-insurance-crisis-premium-rates-soar\" target=\"_blank\" rel=\"noopener noreferrer\">Condo Buildings Face Insurance Crisis as Premium Rates Soar<\/a> by Andrew Duffy | Times Colonist | BIV<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Insurance costs for strata corporations have been skyrocketing in condo-heavy markets such as Vancouver, Toronto and New York, while some buildings have been told flat out their insurance will not &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2020\/02\/condo-buildings-skyrocketing-insurance-crisis\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-14945","post","type-post","status-publish","format-standard","hentry","category-real-estate"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Condo Buildings Skyrocketing Insurance Crisis &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2020\/02\/condo-buildings-skyrocketing-insurance-crisis\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Condo Buildings Skyrocketing Insurance Crisis &#8226; 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