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

Provincial COVID-19 data can now be used for B.C. to prepare for a second wave

In the past week, B.C. has seen a slight spike in daily test-positive case counts

Four air ambulance flights out of Terrace delayed or cancelled

Pandemic precautions caused nighttime closure of service station providing weather data to pilots

Skeena Resources, Tahltan prez excited by purchase of Eskay Creek

Skeena gets full control of mine, Barrick gets 12 per cent of Skeena and a one per cent royalty

VIA Rail lays off 1,000 unionized workers across the country

Northern B.C. route Jasper to Prince George to Prince Rupert is not affected by VIA Rail layoffs

Overall house sales drop in the northwest

COVID-19 pandemic slowed market activity

‘It’s really frustrating’: B.C. Indigenous groups share impact of border closures

The closures have resulted in disputes between Indigenous groups and local businesses

Trudeau apologizes for not recusing himself from WE decision

He says his and his family’s longtime involvement with the WE organization should have kept him out of the discussions

Wage subsidy will be extended until December amid post-COVID reopening: Trudeau

Trudeau said the extension will ‘give greater certainty and support to businesses’

Beverly Hills 90210 star’s family selling Vancouver Island Beach Resort

You can own Jason Priestley’s Terrace Beach Resort in Ucluelet for less than $5 million

Islanders want BC Ferries to follow order that lets residents board before tourists

For ferry-dependent communities, ferries are often the sole practical lifeline to work, school or medical appointments.

Washington’s NFL team drops ‘Redskins’ name after 87 years

The franchise was given the name back in 1933, when it was still in Boston

Genetic detectives begin work to trace spread of COVID-19 in Canada

The kinds of genetic technology being used for this project did not exist when SARS hit Canada in 2003

Sports fishers protest Fraser River Chinook closures

Public Fishery Alliance wants hatchery fish open for harvest

Most Read