Strata condos are an increasing share of the new housing market, with shared liabilities for owners. (Vernon Morning Star)

Poor construction, maintenance driving up B.C. strata insurance rates

Financial regulator finds water damage a major factor

Insurance premiums for strata properties have increased by about 40 per cent across B.C. and some deductibles have more than doubled in the past year, the B.C. Financial Services Authority finds in a new report.

Minor claims, many from water damage in new construction or due to lack of maintenance, have made strata insurance unprofitable and the market is “unhealthy” as a result, CEO Blair Morrison said in releasing the BCFSA’s preliminary findings June 16.

“Despite large increases already being felt, the situation has not stabilized, meaning many stratas, particularly in those in buildings considered to be high-risk by insurers, can expect to face further pricing pressures as well as the risk of not being able to obtain full strata property insurance coverage,” Morrison said.

The new Crown agency, established last year to regulate B.C. mortgage brokers, credit unions, trust and insurance companies, was directed by Finance Minister Carole James to review the situation in February. Just before the B.C. legislature was shut down by the COVID-19 pandemic, the B.C. Liberal opposition raised reports of huge jumps in strata insurance rates and in some cases a refusal to cover condo buildings entirely.

RELATED: B.C. Liberals call for assistance on soaring strata insurance

RELATED: B.C. NDP says strata condo rental bans can remain until 2021

Aside from construction quality problems and lack of maintenance leading to water leaks, the review found “excessive exposure to earthquake risk has prompted insurers to reduce the amount of strata insurance they offer in the province.”

New building construction, building material changes and rising replacement costs have also affected insurance industry profitability, meaning “there is not enough capacity in the strata insurance market to support future expected demand,” the report says.

The strata insurance market is mostly global for-profit businesses. BCFSA found that only nine or 10 companies offer the insurance in B.C. Most are headquartered outside of Canada, and operate through three main brokers.

The BCFSA intends to provide a full report to James and the B.C. government by this fall.


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

BC legislature

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Nimpkish sold as Northern Sea Wolf resumes central coast route

The sale of the Nimpkish was official as of Sept. 20, 2020

Citing stability, B.C. Premier calls snap election for Oct. 24

John Horgan meets with Lieutenant Governor to request vote

BC Timber Sales’ operations on the North Island and Central Coast to be audited

The Forest Practices Board randomly chose the region to check for compliance to legislation

Williams Lake First Nation inks historic cannabis deal with B.C. government

The agreement paves the way for WLFN to sell cannabis to the government, and open stores across B.C.

Cariboo’s Strongest tests athletes’ mettle

Twenty men and three women took part

B.C. reports 96 new COVID-19 cases, one hospital outbreak

61 people in hospital as summer ends with election

Grand jury indicts police officer in Breonna Taylor death

Officer Brett Hankison was charged with three counts of wanton endangerment

First 8 months of fatal overdoses in B.C. have now exceeded 2019 death toll

Nine people died every two days in August, BC Coroners Service data shows

Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Heiltsuk First Nation calling on DFO to close fish farms, citing wild salmon extinction risk

Wild salmon returns have broken low records, have many concerned about future of wild fish

Attorney General of Canada defends Kelowna Mountie involved in rough arrest

Tyler Russell filed a lawsuit against Const. Siggy Pietrzak in June of this year

B.C. could be without a new leader for multiple weeks after Election Day: officials

More than 20K mail-in voting packages were requested within a day of B.C. election being called

Most Read