5833 replies to this topic

[VIResident]

Ask an insurer if your insurance premiums will increase if the use is changed from primary homeowners to renters and homeowners - the answer is yes.  Ask by how much and a ballpark thrown out will be 20%.  Try it.  And.... I know my insurance ****. 

[Matt R.]

It did not change when we had tenants in our house, no. It only changed when we no longer lived in the house.

Matt.

[VIResident]

It did not change when we had tenants in our house, no. It only changed when we no longer lived in the house.

Matt.

Exactly.  A condo unit that is occupied by the owner, and entire complex of condo's that are occupied by owners by way of bylaw is one price.  A condo unit that is occupied by a renter, the entire complex a mix of renters and owners by way of bylaw is another price.  

[VIResident]

Insurers cover their costs.  Actuaries tell insurers what the 'pattern' is and where the 'pattern' is likely to go.  Where rentals are concerned actuaries have over 100 years of 'experience'.  No blame.  Fact.  

Dinged walls in the halls, chipped common doorways are the least of a insurers concern.

Care and attention, liability etc.  These are the hot buttons and cost money.

[Mike K.]

Meanwhile rental buildings are not facing these increases, or at least nobody is talking about them.

[VIResident]

Meanwhile rental buildings are not facing these increases, or at least nobody is talking about them.

Over the course of the next 12 -24 months, as policies come 'round for renewal, we will likely hear plenty.

[Mike K.]

Rental building policies are being renewed by the dozens every day and so far no meaningful concerns have been raised about rapidly rising policy costs.

 

I suspect that the shift affecting condo buildings is an acknowledgement by the insurance industry that condominiums can be inherently more riskier because, unlike a rental building, the strata's dedication to maintenance and upkeep can suffer at the hands of strata disputes, where even simple decisions can take months to table. A rental building usually has one decision maker and in the world of business you don't waste months debating the colour of new balcony railings, you just install them.

 

Politics, if you will, is a far more riskier variable in a multi-unit building than rental tenants.

[RFS]

I think rental apartment building owners are probably less likely to complain to the media than individual condo owners with lots of time on their hands

[VIResident]

Rental building policies are being renewed by the dozens every day and so far no meaningful concerns have been raised about rapidly rising policy costs.

 

I suspect that the shift affecting condo buildings is an acknowledgement by the insurance industry that condominiums can be inherently more riskier because, unlike a rental building, the strata's dedication to maintenance and upkeep can suffer at the hands of strata disputes, where even simple decisions can take months to table. A rental building usually has one decision maker and in the world of business you don't waste months debating the colour of new balcony railings, you just install them.

 

Politics, if you will, is a far more riskier variable in a multi-unit building than rental tenants.

Be assured insurers (and investors) are very aware of Gov. policies, BC Landlord and Tenant Act, there is far more than "one decision maker" at play in BC where renters are concerned.  

Edited by VIResident, 20 February 2020 - 02:41 PM.

[Mike K.]

The key point I’m trying to make is rentals don’t get hung up in years long discussions because a committee can’t come to a decision or owners vote not to pursue work that will carry a levy. There’s no committee in rentals, the owner makes a decision and the work gets done.

The strata system can be a liability.

[Stephen James]

Rental building policies are being renewed by the dozens every day and so far no meaningful concerns have been raised about rapidly rising policy costs.

 

I suspect that the shift affecting condo buildings is an acknowledgement by the insurance industry that condominiums can be inherently more riskier because, unlike a rental building, the strata's dedication to maintenance and upkeep can suffer at the hands of strata disputes, where even simple decisions can take months to table. A rental building usually has one decision maker and in the world of business you don't waste months debating the colour of new balcony railings, you just install them.

 

Politics, if you will, is a far more riskier variable in a multi-unit building than rental tenants.

yup!

In Ontario, when the leaky condo issue became an issue, the rules about keeping up-to-date engineering reports, scheduled maintenance and the reporting thereof became pretty tight.  Same in almost every jurisdiction, except BC.  It's just math.  Insurance industry doesn't make too many mistakes with math...

 

We want to buy a condo when we returned home (here) but abandoned the idea for a house when we realized we'd have no idea the condition of almost any of these properties. It's a shame this Province was so short sighted.

 

I have a family member who's downtown condo was assessed $80,000.00 ++.  She's 83 years old.  She'll be ok but it's heartbreaking to see the young couples in her building who, 1. can't sell; 2. have a worthless investment; 3. some taking 2nd jobs...

 

I complain about the "us vs. them", self-righteous generalizations, etc... but it's also true that, were I a 30-something that was suckered into one of these POS buildings, I'd struggle with my perception of the development community...

[Stephen James]

The key point I’m trying to make is rentals don’t get hung up in years long discussions because a committee can’t come to a decision or owners vote not to pursue work that will carry a levy. There’s no committee in rentals, the owner makes a decision and the work gets done.

The strata system can be a liability.

Only in a jurisdiction where the legislation is 25 years backwards.  It helps everyone when condos maintain the building, keep up-to-date records and all is transparent.  Like too many examples, BC went it alone because we were sooooo much smarter.  (HST anyone?)

[Mike K.]

I complain about the "us vs. them", self-righteous generalizations, etc... but it's also true that, were I a 30-something that was suckered into one of these POS buildings, I'd struggle with my perception of the development community...

Let’s not conflate the developer, and maintenance over a 40-year span.

Now that being said, buildings age. As the saying goes, your home will never be in better shape than on the day it was completed.

[Citified.ca]

Mortgage rates could slip as Bank of Canada cuts key lending rate to 1.25% from 1.75%

https://victoria.cit...1-25-from-1-75/

[Citified.ca]

As we had suspected, the media over-hyped the insurance issue and the actual situation appears far less dramatic. Note that since calling for dire market impacts, the media has gone completely silent over what was a non-issue from the get-go. The buildings that are affected are indeed those that are poorly managed and which have a history of insurance claims. It's no surprise that their premiums would be adjusted.

 

The lessons here are to properly manage a building and keep up with maintenance. There are no shortcuts.

 

Q: How serious is the issue of stratas no longer qualifying for insurance, and is this a wide-ranging problem?

 

Recently the news has been filled with some discouraging stories about stratas experiencing stratospheric rate and deductible increases or being unable to secure insurance at all.  Very few stratas I have heard of cannot access insurance and those with the most dramatic increases seem to be large properties that may have experienced challenges with the frequency or severity of claims.

 

Read on:

 

 

Ten on the 10th: Strata insurance premiums Q&A with Luke Mills of Megson FitzPatrick Insurance

https://victoria.cit...rick-insurance/

[VIResident]

Be aware.  Insurance premiums spiked for NEW and older condo, condominium buildings across Western Canada, here are a few links to articles about Victoria condo's and elsewhere.

Experts in insurance are just that, insurance industry experts. 

Real Estate agents are just that.  Real Estate agents, experts in selling/buying property.

There are ways and means to determine IF a building you are looking to purchase in could have an insurance spike - but then no guarantees they won't.

 

 

1.  https://www.cheknews...rockets-650188/

2.  https://globalnews.c...nce-deductible/

3.  https://calgary.ctvn...spike-1.4666619

4.  https://www.aldergro...y-condo-owners/

5.  https://globalnews.c...insurance-hike/

Edited by VIResident, 10 March 2020 - 10:59 AM.

[Mike K.]

Insurance can’t spike for something that has never been insured before.

And old buildings with a history of claims and poor maintenance deserve higher premiums. There’s no mystery there.

[VIResident]

Insurance can’t spike for something that has never been insured before.

And old buildings with a history of claims and poor maintenance deserve higher premiums. There’s no mystery there.

 

Be Aware

 

"...told the strata the increase was due to fewer insurance underwriters willing to share the risk of a $79 million building."

"....Pauls said he would understand a substantial premium hike if construction or repairs were needed, but Mahogany Tower is brand new and has only been occupied for a year."

"....A three-year-old Langley building saw their premiums go from $97,000 in 2019, to $371,000 last week."

 

https://www.abbynews...insurance-hike/

 

The point is... before you purchase do the homework and understand even though you've done that.... there may not be enough underwriters willing to share the risk. 

Edited by VIResident, 10 March 2020 - 11:57 AM.

[lanforod]

These two answers contradict themselves. Stratas often don't have a real choice in strata insurance deductibles. Insurers set it. So buildings that are now getting a deductible set to 250k minimum instead of 25k  cannot 'consider manageable deductibles', as those are not manageable for individual owners, particularly when a lot of insurers won't do individual coverage that high. I'm still waiting to hear from BCAA if I can get that high of a deductible covered, and how much it will cost.

 

It cost me an extra $75 annual to increase my individual deductible coverage by just 10k (from 25k) last year, that scales to a absolutely crazy value in insurance. I'm not paying $1500 more annually in insurance just to increase my deductible to 250k. I'd sooner sell.

This is in a newer building in New West, maintained well, but with some claims history. Maintenance doesn't stop the idiot who hangs a bathroom mirror and punctures a pipe damaging multiple units below, nor does it deal with a fire from some tool left plugged in for a renovation. That said, if the deductible were 50k, I think there would have been 2-3 claims in the 10 year history, and if it were 100k no claims at all. So why is it going to 250k?

 

If the province sets a loss assessment or deductible cap, then there is either a gap in individual owner coverage and strata coverage, or insurers are forced to keep the deductible lower, resulting in even higher, un-affordable premiums. Just a cap isn't enough; which I suspect we'll see soon enough in Alberta/Ontario.

 

 

Building owners and operators should adopt a proactive approach with respect to regular maintenance and updating/upgrading, and consider higher but manageable deductibles and not making claims if the loss does not exceed the insurance deductible by a reasonable margin.

 

Is there a role for government in light of what’s happening with rates?

Certainly, and an avenue for the condominium industry to consider is to lobby the provincial government to adopt changes to the Strata Property Act such as introducing caps on loss assessments a strata can charge an individual unit owner.

 

 

[Mike K.]

$79 million is a fairly common price for a new condo building.

There is far more to these stories than we’re being told.