strata

TGIF – Condo Insurance Costs Escalating.

As insurance companies reel from fires and floods they are spreading the load and strata corporations are experiencing the sudden steep increase in both insurance costs and deductibles.  As our once new condo buildings age, need maintenance and simultaneously grow exponentially in value, the costs of insuring them increase accordingly. 

Deductibles have previously been at a low between $2500 and $10,000, which in no way account for the costs of emergency measures, relocation and restoration after a flood of any kind of magnitude.  The shock comes now with deductible increases to $50,000 and $100,000. 

Stratas across the Lower Mainland are meeting to discuss the consequences and how to deal with the sudden, steep increases.  Aside from the strata corporations figuring out how to best pay for their insurance, condo owners have to cover themselves for accidentally finding themselves personally responsible for repaying the deductibles. 

In the event of a flood caused by a specific condo owner, that owner will be required to repay the portion of the deductible not covered by the strata.  If the owner has no insurance to cover all or part of the deductible, he/she is personally responsible.  It behooves every strata owner to carefully check with their own personal insurance company to ensure full coverage – the consequences of not doing that and being the unfortunate owner causing damage could be financially crippling.

This new curve ball should make strata buyers cautious in reading the fine print for a building’s insurance and how it is covering the increases.  There are stratas who are afraid that increasing maintenance fees will detract from salability, yet they should increase to cover increased insurance costs or some other required maintenance will either be shelved or all owners levied for that. So….buyers beware of static, seemingly low maintenance fees – read all of those strata documents before committing to a purchase.  And, current owners – be smart in attending meetings, voting  and being fully aware of the decisions being made. These are your homes and investments.

Stratas are complicated and our mandate is in keeping you as safe as possible – knowledge is power.  If you have any questions and need help in best dealing with these issues in a purchase or sale position, please contact us – this is our business. 

We continue in that longstanding tradition of trust and caring and remain your Generations Real Estate Partners: 

Michelle Hawthorne, Scott Johnson, Sheila Francis, Ray Harris and Shane Goutsis.