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

19 times on 19th birthday: Aldergrove teen goes from crutches to conquering Abby Grind

Kayden Van Buren started at midnight on Saturday. By 3 p.m. he had completed the trek 19 times.

Lawnmower catches fire at Langley elementary school

Township firefighters responded, no injuries were reported

LANGLEY’S GREEN THUMB: Tiny hybrids can add stunning colour to the garden

Dwarf lily varieties offer same great features of full-sized plants, including strong stocks

Early morning walks resume at Willowbrook shopping centre

Other Langley indoor walking facilities remain closed

Blueberries ripen as u-pick starts in Langley

The official Blueberry Day is to be held – online – on July 15

Sources say Canada, U.S. likely to extend mutual travel ban into late August

Prime Minister Justin Trudeau hinted at the possibility after a phone call with U.S. President

Professional basketball in Canada begins return to action with COVID-19 testing

Abbotsford’s Fraser Valley Bandits, six other CEBL teams arrive in Ontario for Summer Series

B.C. man who went by ‘Doctor Ray Gaglardi’ charged with sex assault of teenage boys

The man, 75, is accused of assaulting teenage boys he met through Coquitlam-area churches

B.C.’s potential deficit $12.5 billion as spending spikes, taxes drop

Finance Minister Carole James gives COVID-19 outlook

Cold and wet weather has corn farmers waiting across the Fraser Valley

Usually the crop is ready July 5-12 but it’s still a few more days from perfection, says local farmer

Canadians torn on scaling back COVID-19 benefits to save money: poll

Of those surveyed, 78 per cent said they were worried about the size of the deficit

‘Trauma equals addiction’: Why some seek solace in illicit drugs

Part 2: Many pushed into addiction by ‘toxic stress,’ says White Rock psychologist

Hotel rooms for B.C. homeless too hasty, NDP government told

Businesses forced out, but crime goes down, minister says

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

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

Most Read