Koret Lofts in Vancouver’s Gastown neighbourhood is nearly out of money due to skyrocketing insurance rate hikes and deductible fees.
A wide-ranging Financial Post feature that interviews several experts across the country details how several condo buildings aren’t able to keep up with rising costs, forcing strata councils to dip into their reserve funds in some situations.
For example, a 118 unit Gastown building that’s only 15 years old and has no claims on its insurance policy, has had its yearly rate jump from $63,000 in 2018 to $163,000 in 2019 and $280,000 in 2020. This resulted in condo owners’ monthly fees increasing by 35 percent to offset the cost.
In a province where more than 1.5 million people live in condo buildings, this has become a growing concern. According to the Financial Post, some condo insurers left the province between 2019 and 2021 because they found it too risky. This resulted in the remaining insurance companies charging higher fees.
Though the publication reports that more condo insurance providers have returned to the province because the high insurance rates are resulting in bigger profits, the shift is slow and is only resulting in flattening fees or minor decreases.
For example, Tony Gioventu, executive director of the Condominium Homeowners Association of B.C., explained that because insurance rates are dropping, deductibles are also dipping.
“Over the next one to three years, I think we’ll turn a healthy corner on this,” said Gioventu.”
The Insurance Bureau of Canada also claims that condo insurance rates in B.C. are starting to stabilize.
“We continue to hear from consumers and from brokers in the space that the situation for consumers certainly continues to improve,” said Insurance Bureau vice-president Aaron Sutherland.