British Columbia

Amid skyrocketing costs, new report finds B.C.'s strata insurance market 'unhealthy'

Over the past year, strata insurance premiums have risen on average 40 per cent across B.C., 50 per cent in Metro Vancouver.

Strata insurance premiums have risen 50% in Metro Vancouver over the past year, according to the data

A man in a condo tower watches the sunset in downtown Vancouver, British Columbia on Friday, March 20, 2020. Strata insurance cost rose 50 per cent last year alone. (Ben Nelms/CBC)

An investigation into the state of B.C.'s strata property insurance market confirms what most condo and townhouse owners already know: sky high increases in insurance premiums are an indication that something is very wrong.

"Overall, in our opinion, the state of the strata insurance market in B.C. is unhealthy, reads the interim report from the B.C. Financial Services Authority. "That is, a market that fails to meet the goals of sustainability, affordability and availability.

The report found that over the past year, strata insurance premiums have risen on average 40 per cent across B.C., 50 per cent in Metro Vancouver.

As well, it found that deductibles continue to shoot up, doubling and even tripling in many cases.

The report cites a number of factors which are driving the problem:

  • Losses to insurers from minor claims, particularly those resulting from water damage.
  • More claims resulting from poor building maintenance and issues related to poor construction quality.
  • The rising cost of new building construction and replacement costs.
  • A shortage of strata insurance suppliers in the marketplace.

The investigation was launched after a flood of complaints from individuals and strata corporations last year, some of which were hit with 300 per cent and 400 per cent increases in their premiums.

Frank Chong, V.P. of regulation with the BCFSA says the next step in the investigation is to meet with stakeholders, including strata insurers and insurance brokers.

"Our objective is to provide good solid observations to what is occurring in the private insurance sector ... not only to government but also to the financial services sector, namely the insurance sector. "

'No easy solution'

According to Chong, strata corporations and individuals dealing with the spiking costs shouldn't expect a quick fix. 

"We recognize that there is a tremendous amount of pressure exerted as a result of the increases in strata insurance and strata insurance deductibles," he said.

"We believe that this particular issue will not be going away immediately. We understand that this is a complex issue with no easy solution."

A final report will be submitted to government in the fall but a group of property owners in New Westminster say the response is too slow and that direct financial support to strata owners is needed now.

"It's taken six months to confirm what strata owners have been voicing," said a statement from the Anchor Pointe Insurance Task Force. "If the final report isn't released until fall 2020, it will be a full year where strata owners will have to absorb the costs and liability resulting from these unfair premiums."