What’s the Impact of B.C.’s Skyrocketing Strata Insurance Rates?
As B.C. insurance costs skyrocket in 2020, one of the many strata properties heavily affected is the 26-story Mahogany Tower in Abbotsford. At Mahogany, insurance fees have increased a shocking 780 per cent, from $66,000 in 2019, to $588,000 in 2020. The increases can be attributed to a rise in property values, fewer insurers and a jump in costs for insurance companies.
Areas of Concern
With dramatic increases in B.C. strata insurance costs, the Strata Property Agents of British Columbia (SPABC) has identified several areas of concern expected to significantly impact condominium owners.
- Insurance premium increases of 50% to 500% have significant ramifications for strata corporations’ budgets and owners’ strata fees. Many strata corporations are receiving their renewal terms at the 11th hour. In some cases, we have seen buildings that cannot obtain coverage for the full value of the building or are unable to get coverage at all.
- Along with increased premiums, strata corporations are seeing dramatic increases in deductibles —from $10k-15k to $100k-250k and higher. In the event of a claim, a strata corporation may require significant funds on hand to undertake repairs up to the amount of the deductible.
- Homeowners could be on the hook. A homeowner may be personally responsible for paying the deductible or repair costs up to that amount. This unanticipated cost could be financially devastating for a homeowner. It’s could be comparable to having a heart attack in the U.S. without health insurance.
- If a strata corporation cannot obtain full insurance coverage, owners may have difficulty renewing their mortgages. Buyers may not be able to get mortgage financing at all. This could have a chilling effect on the real estate market.
Our SPABC board is concerned as B.C. strata insurance costs skyrocket, the rate hikes will impact our members and their clients. We urge those who have the authority to make decisions around this very serious situation. We ask them to consider the impact on British Columbia and the thousands of people who live in almost one million individual strata units.