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

Castlegar emergency service group looking for volunteers

Volunteers work with both the provincial emergency service program and the Red Cross.

Unofficial holidays: Here’s what people are celebrating for the week of Sept. 27 to Oct. 3

World Farm Animals Day, Drink Beer Day and Virus Appreciation Day are all coming up this week

Two new COVID-19 cases reported in Interior Health

The total number of Interior Health cases since the beginning of the pandemic is now at 522

Cobra Stairs in Castlegar reopen to public

A tree fell on the roof of the stairs earlier this month

West Kootenay mother searching for son missing since Sept. 1

Police are investigating the disappearance of Cory Westcott

B.C. records 98 more COVID-19 cases, most in Lower Mainland

One new senior home outbreak, Surrey Memorial outbreak over

2 British Columbians arrested, 3 at large in massive Alberta drug bust

Eight people are facing 33 charges in what police have dubbed Project Incumbent

97 distressed horses, cats and dogs seized from farm in Princeton

RCMP assisted as BC SPCA executed search warrant

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

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

$250K reward offered as investigation continues into Sea to Sky Gondola vandalism

Police also asking for specific footage of Sea to Sky highway around time of incident

Trudeau ‘disappointed’ by RCMP treatment of Sikh officers over mask issue

World Sikh Organization of Canada said taking Sikh officers off the front lines constitutes discrimination

Liberals reach deal with NDP on COVID-19 aid bill, likely averting election

NDP and the Liberals have reached an agreement on COVID-19 sick-leave

Most Read