A year ago, this column flagged the dramatic rise in premiums for condominium insurance for both strata corporations and homeowners as the insurance companies that write the policies brokers source for their clients looked for ways to recharge their revenues after several weather-related disasters triggered major payouts.
The past year has seen premiums increase by an average of 35% but several policyholders have seen far more significant and devastating increases, often of several hundred percentage points. While risk was being repriced, with some of the largest increases borne by buildings with significant claim histories or other documented vulnerabilities, an apparent exodus of insurers was also blamed.
“The brokers are being monopolized by two large companies squeezing out competitors,” groused Tony Gioventu, executive director of the Condominium Home Owners Association of BC.
The result, or so the story goes, is that some strata corporations have been unable to obtain coverage.
But this isn’t the case at all, according to the Insurance Bureau of Canada. A statement from the organization, which represents private insurers in Canada, claims, “Strata insurance remains widely available, and we’re not aware of any buildings that can’t access coverage.”
However, many strata corporations face delays in securing coverage, explained Rob de Pruis, director of consumer and industry relations with the bureau.
“Policies in the past that may have only had five or six subscribers may now require eight or 10 or 12 subscribers,” he said. “Companies that may have taken a particular per cent share of that particular risk, because they have reviewed their risk appetite, they may decide that they only want to take, say, a 10% portion.”
Brokers have about two dozen insurance providers to tap for coverage, de Pruis explained, each of which will review the building seeking coverage to see how it fits with their appetite for risk. The time-consuming process means brokers – as required under provincial law – give policyholders 30 days’ notice that they may not be able to secure coverage.
“The broker is still able to ultimately place full replacement coverage on these particular stratas, but there may be a few more insurance companies behind the scenes that are subscribing to this,” he said. “There’s no change to the actual strata corporation.”
Other than in premiums, of course, as companies revalue the risk the property presents.
Both the Insurance Brokers Association of BC, which meets in Vancouver this week, and the Insurance Bureau of Canada, which is hosting a roundtable in the city on March 17, feel the recent premium increases have been too high.
Both organizations are working to address the issue, noting in particular the importance of strata corporations taking steps to reduce risks and improve their claims history.
“By building the schools, roads, hospitals, housing, post-secondary facilities and more that our growing province needs, our plan is supporting 100,000 direct and indirect jobs during construction,” remarked B.C. Finance Minister Carole James in delivering the provincial budget last month.
The vigorous claim prompted a glance at the province’s major projects inventory. Current through to the end of September, the inventory records 384 projects worth $115 billion on the go. This is the most since September 2013, when 406 projects were in progress (those projects were worth a mere $83.6 billion).
Of the $350.1 billion worth of projects tracked in the major projects inventory, government and infrastructure projects represent $66.5 billion, or 19% of the total.
Major projects are those with a value of $20 million or more in the Lower Mainland and $15 million or more in the rest of B.C. •