'Sort of unprecedented': Experts concerned by looming condo insurance crisis
VANCOUVER -- Condo buildings in British Columbia are on the verge of an insurance crisis as premiums soar to unprecedented heights.
The market has become so tight that many homeowners and stratas have been refused insurance all together.
“The government's really going to have to step in and do something,” said Chris Stepchuk, Managing Broker and Co-Owner of Fort Park Property Management & Real Estate.
Stepchuk manages properties across the Lower Mainland.
"We've got a few buildings that just right now can't seem to get insurance. They've been dumped essentially and are in a real bind,” said Stepchuk.
Others have had their premiums increase between 50 and 400 per cent in the past year.
Their deductibles are also skyrocketing.
“They have to have insurance for their mortgages, the strata property act says they have to have insurance, they won't be able to sell or buy or really do anything without insurance,” explained Stepchuk.
Experts say climate change is partly to blame for the spike. Recent natural disasters have led to massive payouts.
That financial risk has, in some cases, made being in the insurance industry unappealing and unprofitable.
“It's not rocket science, any insurance company should be able to see a return on investment,” said Chuck Byrne, Executive Director of the Insurance Brokers Association of BC. "The bottom line is that they're not obligated to insure anybody for anything."
Byrne says the onus is now largely on owners and stratas to make their buildings more appealing to insure.
"A good depreciation report is imperative, knowing what the long term maintenance issues are in the building, understanding how to fund a contingency fund to pay for those repairs,” Byrne told CTV News.
Affordability and housing remain key issues in B.C., so many are now turning to the provincial government for a solution.
"We are working with the strata associations,” said provincial Minister of Finance Carole James during question period on Thursday. “We are working with individuals and we're working with the insurance corporations … to be able to take a look at options that are available to be able to ease the pressure."
But with no definitive plan in place, those affected are being left to come up with their own solutions.
“This is sort of unprecedented," said Stepchuk. "It’s uncharted waters and I don’t know what’s going to happen to be honest with you."