There has been some news recently about consumers’ dire concerns regarding BC’s condo insurance market. These concerns are mainly due to the substantial and skyrocketing increases in condo building insurance premiums and, in some extreme cases, condo buildings being unable to get approved for any insurance policies! Read below to learn more.
Condo Insurance Rates Increasing 50-300%
It has shocked most BC condo apartment owners that their overall condo building insurance may increase up to 300%, drastically increasing their Strata fees. As absurd as a possible increase of 300% may sound, some explanations seem somewhat reasonable.
Why The Drastic Increase In Condo Insurance?
Two main reasons condo building insurance policies are increasing so drastically; skyrocketing property values and increases in the overall risk.
Skyrocketing Condo Value Assessments
We’ve all heard about the skyrocketing real estate prices that BC has experienced in the last 5-10 years. These significant increases in property and real estate values may have increased the net worth of many long-term property owners in BC. Still, it has also increased the costs it would take an insurer to replace or rebuild the building in the case of accidents or disasters. The more expensive the property, the more expensive the insurance to cover it is, so as property value skyrockets, so do the insurance policy rates.
Increasing Risk From Climate Change
On top of the skyrocketing property values in BC is the increased risk from natural disasters like earthquakes, fires, floods, storms, and more. As more of these natural disasters occur, more and more insurance claims are submitted, meaning more costs and risks for insurance companies. Insurance companies must increase rates to compensate for these costs and risk increases.
Worst Case Scenario? Your Condo Building Can’t Get or Renew Any Insurance At All
In extreme cases, some condo buildings in BC have been denied and cannot find building insurance. This is a very severe case but significantly impacts the condo unit owners of these buildings because banks require the building to have the proper insurance to finance any mortgage. Therefore, if the condo building does not and cannot get adequate insurance coverage, new potential buyers cannot get financing from banks to finance any new purchases, leaving condo unit owners in a tough spot when trying to sell their units to new buyers. Also, even condo unit owners who don’t want or need to sell their units in these non-insurable buildings are at risk. No bank wants to be exposed to that kind of risk, so there’s the possibility of having pulled current mortgage financing from banks.
What Can Consumers Do?
Unfortunately, there isn’t much condo unit owners can do if their condo building cannot get adequately insured. The best they can do is appeal to the government for intervention. Being in constant contact with the condo buildings’ Strata council, your bank, and your insurance company is also recommended to stay in the loop of what is happening and the possible resolution options.
Contact Harbord – The Home Insurance People!
If you live in Alberta or British Columbia and are looking for Home Insurance, we are here to answer any questions you may have about our range of home insurance products and services. Contact our team at 1.844.544.4663 and see what makes us Harbord – The Home Insurance People™!