VANCOUVER , Feb. 27, 2020 /CNW/ - Today, Insurance Bureau of Canada (IBC) released a set of policy recommendations designed to address the current insurance affordability challenges in BC's strata insurance market.
There are over 35,000 strata corporations in BC. 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, the cost of strata insurance has risen in BC by 35% on average. IBC believes this is too high, and that's why we're working with the government and other stakeholders to find solutions to improve this situation over the long term. 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.
The recommendations released today build on the work of IBC'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:
- Engaging a risk manager to assist condominium corporations to improve their insurability
- Providing education and information on insurance and the importance of risk management and loss prevention strategies for condominiums
- Providing the government with best practices used in other jurisdictions
- Engaging insurers, stakeholders and government to assist condominium corporations facing insurance issues in the marketplace
The first National Commercial Insurance Task Force roundtable was held in Edmonton, Alberta last week. 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.
IBC policy recommendations to help improve the affordability of strata insurance:
- Mandatory education for strata board councils: Educating strata board directors on best practices would allow them to run their stratas in a way that will maximize their resources and reduce risks that could impact elements of building operations, including insurance.
- Review and implement Building Code changes to reduce risk: Amend building codes to ensure buildings have the appropriate measures to prevent and mitigate extensive water damage and other losses in both new and existing stratas. This may include measures such as water leak detection devices.
- Amend depreciation report requirements for strata corporations: A depreciation report (also known as a reserve fund study) provides a guide for strata corporations to set their short, medium and long-term maintenance goals. Currently, B.C. requires strata corporations to obtain depreciation reports however, legislation allows exemptions to this requirement. As a result, many stratas have relied on insurance to fill the gap, which has resulted in an increase in claims and costs.
- Define a standard strata lot in the Strata Property Act: A clear definition of what a standard residential strata lot is. It clearly determines what strata lot owners are responsible for and what the corporation is responsible for, and may help reduce the number of claims made by stratas in BC.
- Capping loss assessments on strata lot owners: A monetary cap for deductible assessments and non-insured loss assessments. This may assist strata lot owners in accessing adequate, affordable insurance products to protect their residences and themselves from a potential financial loss.
About Insurance Bureau of Canada
Insurance Bureau of Canada (IBC) is the national industry association representing Canada's private home, auto and business insurers. Its member companies make up 90% of the property and casualty (P&C) insurance market in Canada . For more than 50 years, IBC has worked with governments across the country to help make affordable home, auto and business insurance available for all Canadians. IBC supports the vision of consumers and governments trusting, valuing and supporting the private P&C insurance industry. It champions key issues and helps educate consumers on how best to protect their homes, cars, businesses and properties.
P&C insurance touches the lives of nearly every Canadian and plays a critical role in keeping businesses safe and the Canadian economy strong. It employs more than 128,000 Canadians, pays $9.4 billion in taxes and has a total premium base of $59.6 billion .
For media releases and more information, visit IBC's Media Centre at www.ibc.ca. Follow us on Twitter @InsuranceBureau or like us on Facebook. If you have a question about home, auto or business insurance, contact IBC's Consumer Information Centre at 1-844-2ask-IBC.
SOURCE Insurance Bureau of Canada
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