Maintenance is the key to avoiding skyrocketing insurance fees in Kamloops and the Okanagan | iNFOnews | Thompson-Okanagan's News Source

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Maintenance is the key to avoiding skyrocketing insurance fees in Kamloops and the Okanagan

February 28, 2020 - 6:30 AM

Since roughly half of B.C. residents live in strata buildings, it’s incumbent on them to do vital maintenance to avoid getting stuck in what appears to be an impending insurance crunch.

That’s according to Tony Gioventu, the executive director of the Condominium Home Owners Association of B.C., who pointed out that everyone owning anything from half a duplex to a home in a high-rise building is part of a strata.

Since August 2019, strata councils in B.C. have seen premiums rise an average of 60 to 150 per cent, he said, but some have gone as high as 500 per cent. He pointed to one example in Kamloops where the building’s deductible went from $25,000 to $250,000.

“It’s not an issue that is affecting the whole market,” Gioventu said. “We have a number of renewals that are within the eight to 15 per cent range."

There are two main reasons for the spike in rates.

Insurance companies are concerned about buildings that are more than 25 years old because key and expensive things like roofs and plumbing systems are more likely to fail. Add to that a history in the past five years of filing insurance claims, and rates are likely to spike.

He gave the Kamloops building as an example.

It was built with what is called a dry sprinkler system. Rather than have water sitting in sprinkler pipes at all times, the water is only activated when needed. That prevents the pipes from freezing in attics and garages.

But, an accidental discharge that triggered a significant insurance claim means the insurance premium went up by 160 per cent and the deductible increased 10-fold.

“We have a fairly rapidly aging housing inventory,” Gioventu said. “With that comes a lot of older buildings that need upgrading, whether it's roofing, elevators or older water delivery systems. All the things that are likely to fail are the things that are getting on the radar screen with the insurance industry.”

Since stratas renew their insurance at different times of the year and the patterns are different every month, he won’t estimate what proportion of the province’s 32,000 stratas are getting hit by large increases in insurance bills.

Gioventu made his comments shortly after Kamloops-South Thompson Liberal MLA Todd Stone tabled a private members bill in the provincial Legislature to amend the Strata Property Act.

While Gioventu is quoted in the news release as supporting the proposal, he said there’s not much government can do and, whatever changes it does make will take a year or two to come into effect.

“Private members bills virtually never go nowhere,” he said. “They’re about posturing. But they are also about bringing major issues to the front when they don’t seem to be given proper attention. I’m supporting anything by any government of any level that is trying to take this seriously.”

During Question Period, the Liberals hammered away at Finance Minister Carole James, portraying the issue as destroying people’s lives. She retorted that she is consulting and working towards a solution.

Gioventu said his association is meeting with government staffers and has tried but failed to get a meeting with James.

While he doesn’t see this as a crisis, yet, he doesn’t want it to drag through consultations for the next couple of years.

Already, there have been cases where stratas have failed to get insurance. He knows of five in the Lower Mainland but there have also been one in Nelson and another on Vancouver Island. He expects there will be more to come.

That has resulted in some prospective buyers having to back out of deals so they’ve lost their deposits.

It’s not yet to the point where it’s having a big impact on the condo market as a whole, but is a sign of trouble on the horizon.

The best defence for strata councils, he said, is to do regular maintenance, like people usually do with cars and homes, so they can avoid making claims.

The other thing individual owners need to be aware of is the importance of being properly insured themselves.

As well as needing content insurance, condo owners are responsible for the cost of any building upgrades, since the strata’s insurance is only on the original building. They should also have liability insurance as well as coverage in case their negligence triggers a spike in the deductible, the cost of which could fall on an individual homeowner.

Ninety per cent of insurance claims are for water damage, Gioventu noted.

View the association’s web page here.

Has your condo building been hit with high insurance rates? Let us know by contacting the reporter or editor in the links below.

To contact a reporter for this story, email Rob Munro or call 250-808-0143 or email the editor. You can also submit photos, videos or news tips to the newsroom and be entered to win a monthly prize draw.

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