According to Canadian Underwriter, the type of materials that are used in strata builds have played a major role in the higher costs of insurance premiums.

As such, wood frames versus concrete are typically used in BC construction, and the high price of lumber has driven prices upwards. So much so that, Opta Information Intelligence pointed to a 400% increase in the cost of lumber between 2019 and mid-2021.

Ranging from fire to water damage, strata deductibles have been on the rise due to harmful weather conditions across the region, which includes significant fire and water damages.

Earthquakes across BC have also let to expensive re-builds, lending themselves to higher premiums.

With construction materials more in demand and costing more on the whole, rebuilding and repair costs could still bring higher rates, in terms of the amount of insurance coverage required to offset the costs the BC strata markets will face.

The reality is that with higher deductibles coming out of condo corporation budgets, premiums have had to also increase. As a result, many strata groups have acknowledged the need to shift towards more prevention methods. To help offset these both present a greater challenges when it comes to increased damage and in turn, higher claims.

Thankfully, there are signs that do have market experts pointing towards more stable strata fees in the new year.

With positive steps being taken toward preventative measures, this may also point towards a more favourable home insurance market, including the outlook for strata corps. in 2023.

In a major attempt to improve strata insurance fees, the Insurance Brokers Association of BC (IBABC) has made some recommendations that they feel will help to clarify any ‘grey’ areas when it comes to differentiating between the ‘insurance duties’ of unit owners and insurance corporation.

For starters, a $50 000 cap on loss assessment has been proposed, since as it stands, unit owners can be left with giant insurance bills that pose a major risk to their financial stability.

This is ultimately, one way that strata corps. feel they can lessen insurance deductibles moving forward.

The IBABC also suggests that all parties would benefit from a more comprehensive ‘standard unit’ definition within the BC Strata Property Act. The goal being that this would ensure units are being kept up to code, in terms of construction criteria, i.e. the walls, subfloor, electrical, plumbing, ceilings, etc.

Again, the idea being that this will help to distinguish between what is the responsibility of the owner and what is the responsibility the corporation when it comes to insurance payments.

IBABC goes on to add that these steps could mean that ‘millions of strata owners’ would be protected from the risk of losing their homes, because they simply can’t afford the rebuild or repair costs.

With these refinements on the horizon, it would seem there is hope for lower strata deductibles in the future – not a rise in high rises!

At Leaders Insurance, our brokers are here to assist you with finding ways to mange you home insurance. We look forward to continuing to support you in 2023 with all of your insurance goals.