How rising strata insurance rates across B.C. could affect you

Condo and townhouse owners in B.C. are reeling in the wake of recent revelations insurance rates for strata buildings in B.C. are seeing a sudden spike of anywhere from 50 to 300 percent.

Jose Antonio Maestre is one of them.

The 49-year-old Vancouverite has been scrambling to get homeowners insurance after his building's deductible went up by 400 per cent — from $30,000 to $150,000 — an amount he says not every insurer will cover, leaving him unprotected in case of damage. 

"I would probably have to sell my apartment, just to cover the deductible," said Maestre, one of many facing a massive hike in insurance costs. 

And his building isn't the only one.

The Condominium Home Owners Association of B.C. says close to 300 stratas have seen large insurance rates increases.

"At the outset, it's a pretty good chance that this is going to affect probably 8,000 to 10,000 strata corporations across the province, if not more,"said Tony Gioventu with the association. 

How are owners affected?

A strata title is described as the individual ownership of part of a property or lot with shared ownership in the remainder of the building.

Gioventu says the rise in premiums for the building can affect condo and townhouse owners in a number of ways.

Many owners could see a hike in their strata fees.

A building's insurance is a common expense that's approved annually and paid through the owner's monthly strata fees.

Because of this, some owners could see hikes on the order of 20 per cent or more, Gioventu says.

Owners will also likely see a hike in their homeowners insurance rates.

If a building's deductible goes up, the owner has to be covered for the new, higher amount. That will translate into higher monthly premiums for owners, Gioventu says.

And because of higher deductibles, Gioventu says many strata corporations will try to avoid filing a claim through the building's insurance, which means owners could be on the hook for the damage, either through the building's owner-contributed contingency fund or through special levies on individual lots.

The deductible for Maestre's building went from $30,000, to $150,000, which means if he is found responsible for the damage, he would be on the hook for it, unless he gets a homeowners insurance policy that will cover the higher deductible.

Currently, there is no limit for how high a deductible can go, said Rob de Pruis with the Insurance Bureau of Canada.

The problem with that, Gioventu warned, is there aren't enough companies in B.C. that offer coverage for deductibles of $150,000 or higher. 

Why are rates going up?

The hike in rates began happening around October, Gioventu says, noting that's around the time many strata corporations renew their insurance. 

An increase in property values, a reduced number of insurers and rising costs for insurance companies are all to blame, he says.

"These conditions have come together over the last three to five years to pretty much bring us to where we are today," he said. 

Although there are currently about 65 insurance companies in B.C., according to the Insurance Bureau of Canada, it's unknown how many actually offer strata insurance policies. The number is closer to six or seven, Givoentu says. 

What can owners do? 

The most important thing owners can do is make sure their building dramatically reduces the number of claims. 

Implementing risk-preventative rules such as no-smoking, forbidding barbecues on balconies or ensuring fire sprinklers have protective cages, will help lower rates, Gioventu says. 

Properly maintaining a building's roof or drainage system, for example, are also good ways to lower the risk of a claim, he added.