Wood Buffalo council will lobby province over condo insurance crisis
Some condo owners forced to pay $6,000 more each year for insurance
Councillors with the Regional Municipality of Wood Buffalo plan to lobby the provincial government after hearing from condo residents about the insurance crisis following the 2016 Fort McMurray wildfire.
At a public hearing Tuesday, representatives from three condo complexes described how the inability to find property insurance is affecting the lives of residents.
"We're going to see foreclosures; we're going to see people forced from their homes," said Robert Guy, with Cedarwoods Condominium Corporation.
In August, the complex of 156 townhouses learned its insurer would no longer offer coverage.
The only insurance the board could find comes with a $947,000 premium and only covers $10 million of the $65-million property. The deductible is $250,000.
We're all angry, frustrated, disappointed.- Joanne Day, Condo board president
The premium means residents must pay an additional $6,000 in condo fees for the year, Guy said.
"It's simply unsustainable."
Issue undermines home ownership
Mayor Don Scott said he doesn't think people outside the municipality are aware of the crisis.
"It's undermining home ownership in the region," he said.
Improperly insured condominiums can lead to breached mortgages, Scott added.
"It's going to end up being a lot of foreclosures, potentially."
The inability to get insurance undermines home ownership, said Coun. Mike Allen, who owns a condominium.
"Things like this are not only detrimental to the individual, but they're detrimental to the region as a whole as we're trying to attract more people to come here and live," Allen said.
Coun. Krista Balsom said she had known of a few cases of condo boards struggling to find insurance, but after hearing from residents she better understood the depth of the issue.
"We're hearing tonight of thousands of people, and this could be in the tens of thousands of people."
Balsom suggested reaching out to other municipalities to see if they have been facing the same issues and potentially banding together to lobby for change.
Joanne Day, president of the Wood Meadow Estates North said the board has made only two claims in the 13 years, both in the last four years.
One claim sought damages for the 2016 wildfire and the other for a major water leak in an unattended unit.
The board's insurance company did not renew the policy and the only coverage the board could find comes with an 800-per-cent increase in fees.
"We're all angry, frustrated, disappointed," Day said.
"I'm sure that there was an underlying assumption by the government that when the condominium property act was drafted that if it was going to mandate that corporations take out insurance, that such insurance would be affordable.
"It's no longer the case."
She added condominiums used to be seen as a good housing option, but it won't stay that way if insurance costs remain this high.
The Insurance Bureau of Canada has said disasters like the Slave Lake and Fort McMurray wildfires and flooding in southern Alberta are forcing insurers to look more closely at risks associated with commercial buildings, such as condominiums.