March 2, 2020 by Jason Contant
Insurance Bureau of Canada (IBC) has issued a series of policy recommendations to help improve the affordability of strata insurance in British Columbia, some of which touch upon suggestions made by the province’s broker association.
IBC’s recommendations include:
Last month, Canadian Underwriter asked Chuck Byrne, the executive director and chief operating officer of the Insurance Brokers Association of B.C., what he thought would help address rising strata premiums and deductibles. Some of Byrne’s suggestions (such as capping loss assessments and defining a strata unit) were reflected in IBC’s recommendations.
Others were similar: Byrne suggested that the industry start a campaign to entice strata (condo) buildings and strata unit owners to adopt technology, such as water detection sensors, flow meters and shut-off valves to mitigate losses. Insurers need to publish their loss mitigation requirements and pass this knowledge to brokers and, by extension, consumers, Byrne said. Eventually, premium and term reductions to strata building owners must be offered. For its part, IBC recommended the amending of building codes to ensure buildings have the appropriate measures (such as water leak detection devices) to prevent and mitigate extensive water damage.
Byrne also suggested that insurance should be mandatory for all condo unit owners in the condo corporation.
According to IBC, there are over 35,000 strata corporations in B.C. As a result of increases in the number of claims and cost of repairs, many insurers have changed how they price policies. As building values have risen, so too have reconstruction and replacement costs when these properties experience an insured loss.
As a result, IBC said in a press release Thursday, the cost of strata insurance in the province has increased by about 35% on average. “Strata insurance remains widely available, and IBC is not aware of any buildings that cannot access coverage. Stratas experiencing difficulty should shop around or contact IBC for assistance.”
IBC’s recommendations build on the work of the association’s National Commercial Task Force, which seeks to bring together insurers, government, and other stakeholders to develop recommendations to help keep insurance affordable and available across the country. Actions taken to date include:
The first task force roundtable was held in Edmonton a few weeks ago. The second roundtable will be held in Vancouver March 17. Participants at that roundtable will discuss the IBC recommendations presented to government, the factors contributing to the current challenges, and to work to identify further solutions to improve the affordability of insurance overall.