B.C. amends law in effort to address high condo and townhouse insurance premiums
September 16, 2020 by The Canadian Press
Print this page Share
VICTORIA – The B.C. government has announced regulatory changes aimed at bringing more transparency to condo insurance premiums that have risen by as much as 40 per cent.
The Finance Ministry says effective Nov. 1, insurers or insurance agents will be required to give 30 days’ notice to condo or “strata” corporations if they intend not to renew a policy or to make any changes.
It says that would ensure stratas have advance warning of cost increases in order to seek other insurance options if they wish.
Referral fees to strata property managers from insurance transactions are also prohibited, effective immediately.
The legislative amendments also mean insurance agents will be required to disclose their commission amount, or a reasonable estimate, to the corporations.
Those who fail to meet that requirement face penalties of up to $25,000 for an individual or $50,000 for a corporation.
The changes will “help strata corporations maintain their financial stability by providing them with the information they need to make informed decisions about their insurance needs,” the Finance Ministry said in a release.
Stratas, or councils involving condo and townhouse owners, have been calling on the province to step in as insurance costs have risen to unaffordable levels.
A government-commissioned report released in June found deductibles increased by triple digits as insurance premiums rose.
Finance Minister Carole James said then that commissions could have been 20 per cent of the cost, but ending referral charges and disclosing commissions would increase competition and may lead to lower rates.
The B.C. Financial Services Authority is expected to release its final report in the fall.
Feature image: A condo tower under construction is pictured in downtown Vancouver on February 9, 2020. A report commissioned by the B.C. government says insurance premiums for condominium buildings have increased by as much as 40 per cent year over year while deductible costs have tripled. Blair Morrison, chief executive officer of The B.C. Financial Services Authority, says the state of the insurance market for condo buildings is unhealthy. THE CANADIAN PRESS/Darryl Dyck
Print this page Share
These changes will have almost no effect on strata insurance costs.
Here are two changes that will actually lead to reduced costs of strata insurance: require underwriters to quote to more than broker without requiring a letter of brokerage; and prohibit best terms pricing.