British Columbia's strata owners have been sitting in fear for the past several months or longer, dreading the day their strata insurance is up for renewal. Insurance companies have a monopoly and it would seem they are taking advantage.
Horror stories include deductibles rising from $50,000 to as high at $650,000. Policies rising as much as 400%. Some strata corporations are struggling to even get insurance. Not only that, they are finding out within 24 hours of the policy's expiration date. Strata councils are feeling under the gun to take whatever they can get and it would seem the insurance companies are picking numbers out of the sky without regard of the consequences.
The Provincial Government is working towards a solution, however, the Question Period discussions read more like a toddler fight of he said, she said. To see yesterday's discussion, please CLICK HERE for the Question Period Transcript.
Horror stories include deductibles rising from $50,000 to as high at $650,000. Policies rising as much as 400%. Some strata corporations are struggling to even get insurance. Not only that, they are finding out within 24 hours of the policy's expiration date. Strata councils are feeling under the gun to take whatever they can get and it would seem the insurance companies are picking numbers out of the sky without regard of the consequences.
The Provincial Government is working towards a solution, however, the Question Period discussions read more like a toddler fight of he said, she said. To see yesterday's discussion, please CLICK HERE for the Question Period Transcript.
According to the interim report produced by the BC Financial Services Authority, out of approximately 6000 buildings:
- 54 per cent had a premium increase of less than 30 per cent compared to the previous year
- 31 per cent saw increases of 30 to 50 per cent
- Nine per cent experienced hikes of 50 to 100 per cent
- Six per cent saw increases of over 100 per cent
To view the Full Report, CLICK HERE
Strata insurance premiums rose approximately 40 per cent across the province on a year-over-year basis, with deductibles experiencing up to triple-digit increases over the same period, a three-month investigation by the BC Financial Services Authority has found.
When you make insurance an essential service and tell everybody they have to get it, it’s part of your mortgage terms, it’s part of your buying and selling terms, it’s going to eventually be part of your just plain living terms,” she said, adding she believes governments have an obligation to step in and make sure such companies are not taking advantage of Canadians.
But, as BC's Minister of Finance, the Hon. Carole James has said before, there are limitations to what the province can do since the issue is with the private sector.
Announcing the initial steps in a plan to address that problem, James said the NDP government will be looking to amend the Strata Property Act and Financial Institutions Act.
B.C.'s finance and housing ministers said the changes will set clear guidelines for what strata corporations are required to do to help condo boards make informed decisions about insurance.
Corporations will also be required to let owners know about insurance coverage, provide notice of policy changes, and let stratas use their contingency reserve fund (CRF) to pay for unexpected increases, if needed.
The ministry says these changes will lead to further updates to B.C.'s regulations:
- identifying when a strata is not required to have full insurance coverage;
- strengthening depreciation reporting requirements (including a limit to use of loopholes to avoid these reports);
- changing the minimum required contributions made by owners and developers to the CRF;
- strengthening notification requirements of changes to insurance coverage and costs; and
- requiring brokers to disclose their commission.
