Strata Insurance Controversy

Strata Insurance: Resources and Actions

Many strata owners are facing significant increases in insurance rates and deductibles. There are also multiple older buildings across the province struggling to find an insurer to renew their policy.
Potential buyers need to understand the insurance situation of strata units they’re looking at so they can make informed buying decisions.
People who already own strata units need to be aware of the financial risks they face. For example, if a plumbing incident caused $75,000 in water damage to a strata owner’s unit and the strata’s deductible was $100,000, insurance wouldn’t cover the claim. In this case, the owner could have to pay for the damages out of pocket, depending on the strata’s bylaws.

What Buyers Need to Know
  • Your Realtor will discuss strata insurance to help you better understand the situation and make the right decision. See the links below for more information.
  • Consult with insurance companies with your Realtor who are knowledgeable about strata insurance and other insurance needs.
  • Discuss ways to protect your interests with your Realtor when writing offers.
What Sellers Need to Know
  • Your Realtor will ask the strata owner to obtain a copy of the strata corporation’s insurance policy or policies.
  • Strata owners should get advice from their insurance provider to understand their liability if the insurance doesn’t cover the strata corporation’s deductible.
  • Ideally, each strata owner should:
    • have a unit owner’s insurance policy,
    • have a policy that covers the higher deductible (insurance deductible insurance) to cover a loss in their unit, and
    • understand the risk of not having enough coverage.
What Caused This
Several factors have led to high strata insurance costs, including a building’s size and construction materials used, claims history, where a building is located, the number of unoccupied units or tenants, the high value of real estate, lack of regular maintenance and the high cost of repairs—especially in the Lower Mainland.
Where to get more information