Many strata owners are facing significant increases in insurance premiums and deductibles. While the word "crisis" is used often in media articles, BCREA believes long-term government policy changes should be made very carefully and with as much information as possible.
There are about 30,000 strata corporations in BC and at least one-quarter of the population lives in strata units. Higher insurance costs for strata corporations get passed down to owners in the form of increased strata fees. If the increases are significant, then there's a negative impact on housing affordability.
The current situation developed over several years. Commonly cited causes for the rising cost of strata insurance include the size and location of the buildings, materials used, claims history, the high value of real estate and high costs of repairs.
BCREA was pleased to see the Insurance Bureau of Canada form its Commercial Task Force, and we welcome the opportunity to discuss this issue with a wide variety of stakeholders in March. In the meantime, we're examining potential big picture government policy changes and looking at other jurisdictions so we can be part of the solution.
In the short term, though, there are two pressing concerns:
- Some strata corporations are struggling to get and renew insurance. We encourage strata corporations with this problem to contact the Insurance Bureau of Canada (1.844.227.5422). Doing so could help you find insurance and will also help us all understand the scope of this problem.
- Potential buyers of individual units need to know how to navigate the uncertainty. REALTORS® working with these potential buyers have clauses they can put into Contracts of Purchase and Sale to get insurance information. To make sure all buyers are informed, BCREA has recommended that Minister of Municipal Affairs and Housing Selina Robinson amend the Form B Information Certificate to require proof of insurance. This form has to be completed when strata properties change hands.