Condo owners face bankruptcies as insurance costs soar

Jeremy Hainsworth | Richmond News

Uninsured condo owners could find themselves bankrupt and homeless if they don’t maintain their suites and personal insurance as strata insurance costs skyrocket, said the Condominium Home Owners’ Association of B.C.

The cost of catastrophes, construction, claims and reinsurance has pushed insurance premiums on many British Columbia strata corporations, or condo owner groups, through the roof.

The concern for individual owners is not having their own suite insurance to handle unforeseen crises, said association executive director Tony Gioventu.

If something from a suite causes damage to common property, the suite owner would be responsible for the deductible of the corporation, he said.

Korecki Real Estate Services Inc. manages 7,500 strata units in dozens of Lower Mainland buildings. Of the strata corporations that have recently renewed their insurance, around 90% saw premium increases of 50-100%, Korecki property manager Mike Alavi said. “We saw half of the stratas get hit on December 31, and the other half are going to get hit on April 30,” Alavi said.

Those jumps are above the Insurance Bureau of Canada’s provincial average of 35%, but below some of the jaw-dropping 300-600% increases Gioventu has heard of.

And, with building insurance rates soaring, so are deductibles, payments an individual could find themselves responsible for.

“Those deductibles are no longer $25,000,” Gioventu said. Instead, an owner could face a bill ranging from $100,000 to $750,000.

A problem, Gioventu said, is many people no longer face the condition of insurance for a mortgage once the latter is paid off. And some don’t reinsure, leaving themselves vulnerable.

Moreover, some don’t maintain their suites, leaving themselves open to huge bills if something goes wrong.

“I am amazed at the number of people who don’t purchase homeowner insurance when they live in condos,” Gioventu said.

He cited an issue of people hanging clothes from fire sprinkler heads.

“These types of claims can easily reach $1 million,” he said.

“You could lose your home.”

Gioventu also stressed the need for strata corporations – especially those in aging structures – to be proactive in maintaining their buildings. Neglect is a recipe for incurring a claim that will make reinsurance harder and more costly, he said.

He said some stratas have received insurance notices with massive increases the day before they are due.

“We have stratas that are in a real crisis,” he said.

Gioventu stressed the importance of depreciation reports that can point a strata corporation toward future problems that should be planned for. But, he said, the provincial government has allowed corporations to opt out of such reports, leaving inspections neglected and planning not done.

“The object is to make sure properties are being maintained or repaired,” he said. “They are restricted by what the owners won’t pay for funding.”

Part of that, he explained, is that strata councils need to remember “ they are a board of directors of a company and [they should] behave like that.”

And, that would make getting insurance harder as claims rise.

“The strata is going to end up paying the cost,” he said. “It could potentially end up bankrupting a community.”

Gioventu said the government has a role in mitigating the problems condo owners face.

One plan might be for government to amend legislation to allow stratas to negotiate insurance fee charges.

Source: Glacier Media 

 

SGI Canada reminding travellers to protect homes during deep freeze

Saskatoon / 650 CKOM

For those homeowners looking to recharge their inner batteries, thaw out and start Googling exotic vacation spots, SGI Canada is reminding them to hold on and double-check their home insurance checklists.

Western Canada’s current cold spell is an example of weather that can take a nasty, damaging toll on one’s home.

“We do see an increase in claims activity when the temperature plummets like this,” said Kurtis Reeder, the company’s senior director of personal lines underwriting.

“Two of the more prevalent claims are water escape due to water freezing in pressurized lines, and then expanding, breaking the pipes, and causing a lot of water damage in the home.

“The second one is due to fire. With the increased use of heating appliances in the cold, there is an increased risk of fire caused by the heating appliances.”

He recommended homeowners check with their insurance brokers as to the conditions their policies have for coverage when they’re away on vacation.

For example, SGI Canada’s policies say that if an owner is away for 10 days or more, they have to have someone check on their home daily, shut off the water supply to the house and drain the pipes or have a home security company monitor temperature decreases, he said.

Otherwise, the policy isn’t valid.

“Every company has similar conditions, but they could be a little bit different,” Reeder said.

Water pipes can freeze and burst if a door or window is left open over a long period, or a home’s furnace shuts down and can’t fire back up, he said.

Even for people planning shorter getaways, Reeder recommended someone checking on the home every day, picking up the mail and turning on different lights inside.

Those are deterrents to potential thefts and break-ins.

He also offered some digital advice: Avoid posting photos and travel updates on social media until the vacation is over.

“Share those pictures and your travel stories when you return and not while you’re on vacation, because it could make yourself a target for theft,” he said.

Reeder said SGI Canada’s website and social media feeds regularly post updated home and travel insurance and online security tips.

Source:

Saskatoon / 650 CKOM

Insurance sticker shock for condo owners

Ross McLaughlin, CTV Vancouver

Condo owners are bracing themselves as strata councils try to renew insurance coverage.

“It’s going to be a shocker,” said Tony Gioventu, executive director of the Condominium Home Owners Association of B.C.

Some strata buildings are facing increases from 50 per cent more to three times as much as last year.

“We came across a development last week where the policy has increased from $300,000 to $1.2 million,” said Gioventu.

Property management companies are warning strata councils to be prepared, with one report of a building with an insurance premium increase of nearly 700 per cent.

Deductibles are also expected to increase anywhere from $100,000 to $500,000 and beyond.

“The deductible will certainly be a devastating blow to the financial reserves of these communities or to the cost of individuals,” said Gioventu.

Impact on condo owners

Higher premiums will affect owners’ monthly strata fees – and homeowners could see a 20 per cent increase, or more.

Individual condo owners may also have to carry the full load of an insurance claim. Consider an instance where a condo owner gets distracted while filling the bathtub and it overflows, damaging several units below.

“It’s very possible individual owners are going to find themselves liable for these high deductibles if they’ve been responsible or the cause of these claims,” he said.

That could happen if the total damage is $140,000 for example on a policy with a $150,000 deductible. The strata may decide not to file a claim leaving the owner responsible for the damage on the hook.

And in the event that a strata does file a claim and there’s a high deductible, it will be spread among all condo owners. Gioventu urges many condo owners to buy homeowners insurance, which often covers strata deductibles. However, it’s difficult to find any insurance companies that offer homeowner’s insurance to cover strata deductibles above $50,000 for individual owners. So if any of your share of the strata deductible goes above the limit covered by your homeowner’s policy, you’d have to pay it out of pocket.

Who’s affected?

Not all condo buildings across the province will be affected in the same way. Some may see little or no increase. The hardest hit will be large expensive buildings, those that have had several claims in recent years and those strata councils that haven’t kept up with maintenance and repair, resulting in a higher risk of claims.

Why is it happening now?

“Some insurers are really re-evaluating their underwriting criteria and their risk appetite,” said Rob de Pruis, director of consumer and industry relations for the Insurance Bureau of Canada.

He’s says there are about 65 commercial insurers in B.C. and not all of them offer insurance to strata corporations.

Gioventu says B.C. has fewer companies offering strata insurance than in other provinces, reducing competition.

Also catastrophic events like B.C. wildfires and flooding hasn’t helped – but it’s not just events happening here that have an impact.

Climate change is considered a factor in several extreme weather events, like wildfires and flooding in California, hurricanes on the East Coast, and the major flooding Alberta experienced in the last decade.

The global impact of catastrophic coverage affects insurance rates in Canada too. Some Canadian companies buy that coverage from global insurers. It’s called re-insurance.

“And because of that, that may also factor in to the premiums for different corporations and commercial entities across Canada,” added de Pruis.

According to the Insurance Bureau of Canada, years ago insurers would pay out about $500 million annually in Canada. In 2018 they paid out about $2 billion and that risk is being passed around.

“This really disperses the liability away from the corporation and down to the individual owners,” said Gioventu.

Source: CTV Vancouver News

Are you clear on what hazards your home insurance policy covers?

Are you clear on what hazards your home insurance policy covers?

Guelph today

Protect your home and avoid getting buried by costly repairs this winter

Yes. Your home insurance policy protects your home from various calamities that may occur. However, the winter months bring a lot of severe weather that could potentially damage your home in ways you may not have considered.

Snow and ice can damage more than just your roof

During the winter months, some days the snowfall never ends. This means that not only are you constantly having to shovel your driveway, walkways and sidewalk, but you may also have to clear the snow off of your roof. This is because the accumulation of snow can cause extra weight that your roof is not equipped to handle.

Some snow on your roof is okay, but experts suggest that once it accumulates to over two feet, you should hire a professional to safely have it removed. This is because your roofing material, which may not be covered by your insurance, can be damaged, and if left as is can cause and contribute to water seepage and structural damage.

Signs that may indicate water seepage include blistering and water stains or drops on your top floor ceiling. While cracks in your interior walls or warped ceilings could indicate structural damage to your home.

Not all water damage is equal – or covered

While most home insurance policies cover water or flood damage, it does not necessarily mean your policy includes all causes of water damage. For example, according to the Insurance Bureau of Canada, most home insurance policies include burst pipes coverage, however, water damage in the basement due to sewer backup may not be included unless it is specified in your policy.

Similarly, you may have coverage for severe storm damage, but it is not mandatory coverage, nor is sewer backup or overland flooding (overflow of rivers or dams onto dry land), so you may want to upgrade your policy to ensure your home is adequately protected against different types of water damage.

The dangers of ice dams

Ice dams are another winter weather hazard that could cause water seepage and damage to your home. Ice dams are the build-up of ice on the bottom of sloped roofs caused by melting snow that accumulates and freezes at the edge of your roof. If not removed, the ice dam will prevent melting snow from falling off your roof. And with nowhere to go, water can seep into your ceiling and walls causing extensive interior damage.

While you may have insurance coverage for the weight of ice and snow and certain types water damage, it’s a good idea to check your policy to ensure that you have ice dam damage coverage, as it is not automatically included in all home insurance policies.

Do your part by winterizing your home

While having the right insurance coverage is essential, keep in mind, you must maintain your home and property to avoid certain caveats in your policy that would nullify your coverage. The Insurance Bureau of Canada offers several tips on how to winterize your home to help prevent winter weather damage from occurring.

While some damage could be avoided with the right preparation and know-how, the best protection remains proper insurance coverage. For information on the best ways to safeguard your home from the hazards of winter, or for a competitive quote, click here.

Most Canadians don’t know key details about their properties & that makes getting home insurance quotes inaccurate & annoying

A recent home insurance survey conducted by LowestRates.ca found that the majority of Canadians don’t know key details about their homes, meaning when it comes time to get home insurance, their initial quote might not match the final price.  This also means comparing prices to get the best rate is often time consuming and a pain.

The survey found that 59.24% of respondents do not know the replacement cost of their home — essentially, what it would cost to replace the structure they inhabit. Many homeowners mistake this as the price they paid for their home when they bought it or what they could sell their home for now.

The survey also found that 30% of Canadians don’t know what year their property was built, 43% don’t know what the square footage of their property is when including the basement and one in four don’t know how close the nearest fire station is to their home.

Knowing this information is crucial to getting an accurate home insurance quote.

“These results are pretty surprising,” says LowestRates.ca’s Co-Founder and CEO Justin Thouin. “Having the right information is crucial to getting an accurate home insurance quote, but more importantly, incorrect information can invalidate your home insurance.”

Respondents fared better in other areas of the survey: 81.11% of homeowners are aware of the kind of primary and secondary heating their homes use. But in all areas, there was a significant percentage of Canadians who weren’t aware of basic details of their homes.

LowestRates.ca has simplified the home insurance quoting process by introducing a brand new comparison tool that automatically pulls all this information for homeowners. The new quoter is now live in British Columbia, Alberta, Ontario, Quebec, Nova Scotia, the Yukon and the Northwest Territories, and will go live in the rest of Canada in the coming months. Canadians can use the quoter to quickly and easily compare prices from leading brokers and insurance companies to find the best price.

“This will eliminate errors when it’s time to get home insurance,” says Thouin. “We’re thrilled to launch this brand new, innovative quoter, which will allow Canadians to quickly and easily compare home insurance quotes online so everyone can save money and get the right policy for their unique needs.”

The LowestRates.ca survey results show that the majority of homeowners, 75.44%, currently have home insurance, while just over half (50.36%) of homeowners have gotten a quote for home insurance during the past year. The survey asked how much time Canadians think it takes to get a home insurance quote — 40.76% of respondents reported they thought it takes ten minutes, while 20.43% believed it takes twenty minutes. The remaining responses are split down the middle: 19.40% of respondents reported that they thought it takes less than five minutes to get a home insurance quote, while 19.40% indicated that they thought it would take more than thirty minutes.

With the new LowestRates.ca home insurance quoter, however, it’s possible to get more than 15 quotes in just three minutes.

“We want to make sure that homeowners have the coverage they need to protect their homes, and to be aware of the costs associated with unexpected events,” said Thouin.

The LowestRates.ca home insurance survey was conducted from July to August 2019 and sampled 969 respondents across Canada.

About LowestRates.ca
LowestRates.ca is an online rate comparison site for insurance, mortgages, loans and credit card rates in Canada. The free, independent service connects directly with financial institutions and providers from all over North America to offer Canadians a comprehensive list of rates. LowestRates.ca’s mission is to help Canadians become more financially literate, with the goal of saving them $1-billion in interest and fees.

SOURCE LowestRates.ca

Brokers say it’s important to check before you get in the business

Read more

Subscribe To Our Newsletter

Join our mailing list to receive the latest news and updates from ILSTV

You have Successfully Subscribed!

Pin It on Pinterest