5833 replies to this topic

[VIResident]

Ah, there we go. 30 years is a long time. That’s when a lot starts to go wrong. And the new build, who knows what the story is there. There could be a problem with the building not being discussed in the media.

Everything from soil conditions to adjacent buildings to a defect could be impacting these rates.

And no, the market won’t collapse.

Enter the Actuary.  Prediction models to estimate risk levels is the job of the actuary.  AI is starting to play a bigger role here. Prediction models are based on assumptions that attempt to reflect real life and affect insurance as equally as claims history i.e. new builds. 

[Mike K.]

Indeed.

The insurance industry isn’t stupid. They’re well aware that strata councils are made of up people who have no business running a $75 million building and deciding what maintenance to do, and which to hide for the next guy to deal with.

All that being said, rental buildings are also facing higher insurance premiums or are having issues landing a plan. The age and maintenance of these buildings has a lot to do with it.

[Mike K.]

Enter the Actuary. Prediction models to estimate risk levels is the job of the actuary. AI is starting to play a bigger role here. Prediction models are based on assumptions that attempt to reflect real life and affect insurance as equally as claims history i.e. new builds.

Sure. But the condo market isn’t going to collapse. Don’t buy into the hype.

[Banksy]

The media love a good collapse story so don’t fall for it.

People need places to live and the landlords who rent out units in these buildings will apply for an annual rent increase higher than the minimum and get it so don’t worry about them either.

Edited by Banksy, 11 February 2020 - 08:23 AM.

[lanforod]

I don't expect a collapse of the condo market either. I am expecting my cash flow on my rental to become even more negative, to the point I may consider selling; even though I have excellent, long term tenants.

 

In my strata's case, claims history is so so. There have been some claims for water and fire damage in the complex (which is 12 years old, in New West). I don't think the dollar values have been super significant though, certainly not enough to warrant a 300%+ increase in premiums. The claim amounts definitely total far less than the premiums cost per year I suspect, and that gap will widen. It'll only be worth it in case of a total loss or massive leak/fire.

 

I'm fairly certain that all the claims have fallen below the new 250k deductible (not certain that's the final number, thats just the temporary number for this month), so with the new policy, we'd have no claims, it would all fall on personal/owners insurance which isn't mandatory, necessarily.

Edited by lanforod, 11 February 2020 - 08:46 AM.

[VIResident]

Canadian Underwriter publication (since 1932 and the go-to publication for anyone in the insurance industry) reported out late yesterday and this is the nugget right here:

 

"As condominium (strata) insurance premiums and deductibles continue to rise across the country, the Insurance Brokers Association of B.C. (IBABC) is recommending two key reforms to the Strata Property Act:

 

• A $50,000 cap on loss assessments (which may not apply in cases involving negligence)
• The addition of a standard definition of a strata unit. "

“Having a legislated standard unit definition would greatly clarify the responsibilities of strata building insurers via their offered insurance policies versus the responsibilities of strata unit owners and their insurance responsibilities,” IBABC said. “This clarity would assist with proper insurance-product pricing and start the journey back to stability for the strata insurance market in B.C.”

These two recommendations could protect millions of strata unit owners from further risk of losing their homes and likely help mitigate future insurance market cycles, IBABC said."

(Strata owners CAN make this happen for their own buildings in the absence of higher governing body implementation.  My recommendation would be WORK with the insurer, employ their assistance - however the strata corp. would still have to hire a lawyer, rewrite the by-law etc. hold extraordinary general meeting with owners etc. the effort is worth it in that it may save the strata corp. hundreds of thousands and owners very large increases.  Any strata corp. looking at insurance renewal in the next 6 months may want to get a jump on this and start now.  Those stuck at the renewal right now - could ask insurer for extension, work with strat corp and hustle to make things happen.  In any case a good strata management company should be on this for the corp. )

Link to entire article is here:  https://www.canadian...ums-1004173686/

Edited by VIResident, 12 February 2020 - 07:12 AM.

[Victoria Watcher]

what if the costs for common area electricity or grounds maintenance or elevator repair ended up costing all strata unit owners an extra $125/mo.?  what if interest rates went up 2%?  life would go on hardly a beat would be missed.     insurance is up.  some insurance companies will see this as an opportunity.  i don't know i don't see the big issue.

[VIResident]

what if the costs for common area electricity or grounds maintenance or elevator repair ended up costing all strata unit owners an extra $125/mo.?  what if interest rates went up 2%?  life would go on hardly a beat would be missed.     insurance is up.  some insurance companies will see this as an opportunity.  i don't know i don't see the big issue.

You can take a seat now.

[Victoria Watcher]

what does that mean?

[DustMagnet]

what does that mean?

 

 

It might mean, "You've had your chance to state an opinion that flies in the face of the evidence, so now you should stop commenting."

But that's just a guess - I could be completely misinterpreting his meaning.

[VIResident]

Times Colonist Editorial Board has weighed in on condo insurance challenges:

 

"When Finance Minister Carole James was asked what steps her ministry is taking to address the problem of rising insurance costs, she replied with the lamest of answers: “We think there are good opportunities to be able to talk with the industry, to talk with condos, to talk with insurance companies, and look at how we can address this issue.” In a follow-up statement, James basically gave the same advice we’ve offered here."

"Far more is needed. Half of all British Columbians reside in strata properties. Much of their net wealth is vested there.

 

If insurance becomes unaffordable, a financial disaster will follow.

We need action, not words, from the province."

https://www.timescol...isis-1.24076256

[Mike K.]

More fear mongering.

Tens of thousands of people pay $150-$250 for a two hour concert. We underestimate just how flexible people can be when it comes to expenses like this. Yes, it’ll stink to pay more insurance but people will adapt. Who should be worried are restaurateurs, publicans and liquor distributors. Those expenses are the first to be cut when people tighten their belts.

[LeoVictoria]

Times Colonist Editorial Board has weighed in on condo insurance challenges:

"When Finance Minister Carole James was asked what steps her ministry is taking to address the problem of rising insurance costs, she replied with the lamest of answers: “We think there are good opportunities to be able to talk with the industry, to talk with condos, to talk with insurance companies, and look at how we can address this issue.” In a follow-up statement, James basically gave the same advice we’ve offered here."
"Far more is needed. Half of all British Columbians reside in strata properties. Much of their net wealth is vested there.


If insurance becomes unaffordable, a financial disaster will follow.
We need action, not words, from the province."
https://www.timescol...isis-1.24076256

Funny how fast people go whining to the government for a handout

“ A proper maintenance schedule will help, but owners are often reluctant to face the costs involved. ”

I too would like to ask everyone else to pay for my lack of foresight

Edited by LeoVictoria, 14 February 2020 - 09:05 AM.

[Mike K.]

Funny how fast people go whining to the government for a handout

“ A proper maintenance schedule will help, but owners are often reluctant to face the costs involved. ”

I too would like to ask everyone else to pay for my lack of foresight

Absolutely. This is why it is so, so important to be engaged with one’s strata council and take the effort and the time to be informed.

[lanforod]

I was thinking that insurance rates for strata buildings have been relatively low compared to SFH anyways, but the shift has been a bit too far for some buildings.

 

Rough 2020 numbers, a million variables change these of course:

4k to insure a 1 mill SFH.

340k to insure a 55 mill Condo complex.

 

That doesn't scale, but it used to be 65k to insure that same 55 mill Condo complex, which seems rather low the more I think about it (ignoring increased cost to rebuild).

Edited by lanforod, 14 February 2020 - 09:18 AM.

[LeoVictoria]

I was thinking that insurance rates for strata buildings have been relatively low compared to SFH anyways, but the shift has been a bit too far for some buildings.

 

Rough 2020 numbers, a million variables change these of course:

4k to insure a 1 mill SFH.

340k to insure a 55 mill Condo complex.

 

That doesn't scale, but it used to be 65k to insure that same 55 mill Condo complex, which seems rather low the more I think about it (ignoring increased cost to rebuild).

Time to switch insurers.   I paid $1128 last year to insure our SFH valued at about $850k.   That’s earthquake included.

deductibles cranked but that’s what most should do.  Insurance is there to protect against catastrophic losses, not to pay for your bikes when they get stolen

Edited by LeoVictoria, 14 February 2020 - 10:02 AM.

[VIResident]

Funny how fast people go whining to the government for a handout

“ A proper maintenance schedule will help, but owners are often reluctant to face the costs involved. ”

I too would like to ask everyone else to pay for my lack of foresight

On the face of it one would think right?  BUT there are several 'new' buildings, one in Van no history of any claims - insurance jumped from $30k to $300k 

Edited by VIResident, 14 February 2020 - 10:04 AM.

[Redd42]

My tenant's insurance has gone from $275 in 2015 to $422 this year - bill due this week.

 

Not quite doubled but almost. No change in amount covered.

 

Didn't move residence. No claims, ever.

 

Interestingly, our business insurance only went up a few dollars this year, basically no increase at all. Again no change in amount covered, no change of location, no claims ever.

[VIResident]

More fear mongering.

Tens of thousands of people pay $150-$250 for a two hour concert. We underestimate just how flexible people can be when it comes to expenses like this. Yes, it’ll stink to pay more insurance but people will adapt. Who should be worried are restaurateurs, publicans and liquor distributors. Those expenses are the first to be cut when people tighten their belts.

All fine and good when you are the occupier but when you've 'rented' out the unit, well all know rental increases are limited.  Think about that for a second.  Rent is high here right? and Vancouver, landlords can't raise the rents enough to cover the insurance costs and the equity at the end-of-the-line not so good.  Also the number of seniors on limited income.  Initially I was of the same thinking as you Mike, suck it up etc. however since I've done some research, experts in the industry and others who are more knowledgeable than I are gravely concerned.  

[Victoria Watcher]

all landlords can go apply for special rent increases above the annual limit.  and they will usually get it if they can show documentation.

Edited by Victoria Watcher, 14 February 2020 - 10:19 AM.