If you own a condo property anywhere in BC, then you’re probably aware of the current insurance crisis that is grabbing headlines right now, and making Strata living miserable!
In case you’ve been under a rock for the past several months, then here’s the skinny. Due to a lack of capacity in the market, insurers are jacking the insurance premiums for property insurance anywhere from 20% to 500%. Deductibles are also seeing similar type spikes. It’s not uncommon to see a typical $5,000 or $10,000 water deductible increase to $25,000, $50,000, or even $100,000 in some cases.
We manage a few strata buildings in our portfolio at the moment that can’t get insurance, even with a higher premium or deductible!
3 things a Strata Corporation can do to keep their insurance increase to a minimum
Since this is all so new, there are many more questions out there than answers unfortunately. Here are a few things we have found that help with keeping insurance premiums in check;
1. Stay Claims Free
It would seem that, as a Strata Corporation, your best bet is to stay claims-free at all costs! In the past you might have opened a claim for $15,000 in damages if your deductible was $5,000 or $10,000, but we are recommending that you think twice about this moving forward. Strata Corporations might be much further ahead simply paying for the damages out of the CRF and moving on. Steer clear of the restoration companies that tend to inflate the invoices for insurance companies, and you will likely be able to keep the damages much lower than you might think.
2. Keep on top of your maintenance plan
Right now Insurance brokers are being very selective about which buildings they want to insure. Having an updated depreciation report, along with a plan to fund the report and keep all components of the building updated and in good working order is essential! Having a solid plan means less risk to them, and will result in more favorable insurance policies for your building.
3. Look at exclusions
If there are certain components of your building that are causing the insurers to be skiddish, work with your insurance broker to see what you can exclude that will help them view the building as less of a risk.
We are fully expecting the market to tighten even further before things get better, so prepare for a rock 2020, and think about these 3 steps that you can take as a Strata Corporation.
Looking for some solid Strata Management advice? Reach out to our Property Management Company here.