Does your building have proper insurance?Did you check with the strata company that manages your building.You have to make sure you are covered in today's insurance policy rules that have taken real estate world by surprise in the first quarter of this year.
Many strata owners are facing significant increases in insurance rates and deductibles this year. There are also multiple older buildings across the province struggling to find an insurer to renew their policy.You might be asking why is this happening ,why now.
Several factors have led to high strata insurance costs, including a building’s size and construction materials used, claims history, where a building is located, the number of unoccupied units or tenants, the high value of real estate, lack of regular maintenance and the high cost of repairs—especially in the Lower Mainland.
People who already own strata units need to be aware of the financial risks they face. For example, if a plumbing incident caused $75,000 in water damage to a strata owner’s unit and the strata’s deductible was $100,000, insurance wouldn’t cover the claim. In this case, the owner could have to pay for the damages out of pocket, depending on the strata’s bylaws.
If you are in the process of buying a strata unit, talk to your buyer's agent about it, your agent will provide you with the insurance policy that particular strata has and with that you have to consult with insurance companies and insurance brokers who are knowledgeable about strata insurance and other insurance needs.This way you will be best informed about what insurance you need for that particular strata property you are buying.
Potential buyers need to understand the insurance situation of strata units they’re looking at so they can make informed buying decisions.You should not be scared about buying strata units, just get yourself informed and do your due diligence and ask the questions.
You can find more information about strata insurance in the links below:
- Legally Speaking #515: Liability for strata insurance deductibles (BCREA)
- Condo insurance crisis: What you need to know (Fraser Valley Real Estate Board)
- Help your clients understand increasing strata insurance rates and deductibles (Real Estate Board of Greater Vancouver)
- How do strata corporations and owners manage the dramatic increase in insurance rates? (Condominium Home Owners Association of BC)
- Strata insurance rates are rising: Here’s what strata councils and unit owners can do (Insurance Brokers Association of BC)