Rob Parker said there wasn鈥檛 much advance notice of a big insurance premium hike at the 95-unit Prestwick townhouse complex in 91原创鈥檚 Willoughby Heights area where he lives.
On Friday, March 20th, three days before the insurance was due to be renewed, Parker, the strata council president, learned the premium would nearly triple, rising from $88,000, to $250,000.
鈥淢onday (March 23rd), that was the deadline,鈥� Parker related.
Shared among the owners, it could work out to hikes as high $2,900, for the larger townhouses.
Parker said the strata council managed to get a 30-day extension to try and find a different insurer, but the search hasn鈥檛 been going well, and he is worried if the increase goes through, it will be too much for certain owners.
鈥淪ome of the people won鈥檛 be able to afford it,鈥� Parker predicted.
Prestwick, located at 7138 210 St. in Willoughby Heights, is about two years old, and has never filed a claim, Parker told the 91原创 Advance Times.
鈥淲e鈥檙e a brand-new building.鈥�
When he contacted BFL Canada Insurance Services Inc., Parker said he was given several reasons for the premium hike.
He said among other things, the BFL staffer he spoke to cited the risk of earthquakes, the fact the townhouses are wood frame, and the risk of fire.
Parker replied that the buildings were in the same location, and made of the same material as they were the previous year, when the premium was substantially lower.
鈥淲e didn鈥檛 change from a concrete building to a wood building,鈥� Parker remarked.
He said another insurer did propose a lower premium hike, but then withdrew its offer.
Searching for a better deal has been complicated by the restrictions on large gatherings during the COVID-19 crisis, which means the 95 owners will have to be consulted by a telephone conference call.
A spokesperson for BFL, Vital Adam, said they are not an insurance company, they are a broker that doesn鈥檛 set insurance rates.
鈥淲e are independent insurance brokers, we don鈥檛 fix the price or set the premium,鈥� said Adam, BFL vice-president, communications.
鈥淭he insurance companies who we work with on behalf of our clients determine the price / premium, not us.鈥�
Several other condo projects have seen sudden jumps in their insurance costs in 91原创 and elsewhere.
In December, residents of a three-year-old 181-unit strata in the Yorkson Creek Complex near 208th Street and 80th Avenue, learned their insurance deductible would climb from $5,000 to $250,000 for water damage and sewer backup losses.
At the same time, they were told the strata鈥檚 insurance premium was going to rise from $97,000 to $371,000.
READ ALSO: VIDEO: Insurance shock for 91原创 condo owners
At Abbotsford鈥檚 tallest building, the brand-new 26-storey Mahogany Tower, the insurer raised premiums by 780 per cent.
Mike Pauls, the president of the building鈥檚 strata council, said the strata was shocked when they saw their insurer, BFL, had raised their rates from $66,000 to $588,000.
Pauls said covering the hike will require a one-time levy of $3,000 per unit, as well as doubling the monthly strata free to $600.
READ MORE: Insurance skyrockets 780% for Abbotsford condo owners
READ ALSO: LETTER: Province must take action on condo insurance
91原创 realtor Corbin Chivers called the rise in premiums a 鈥渟trata insurance crisis鈥� that will drastically change the future of condo and apartment real estate in the Lower Mainland and Vancouver.
Chivers who is with Stonehaus Realty, predicted rising insurance premiums could drive up strata fees by 20 percent or more, which is creating uncertainty that could discourage buyers.
鈥淚n a market which can already prove tricky to navigate, especially for first-time homebuyers, it is worrisome to see what is happening with strata insurance,鈥� Chivers said.
Chivers said there is no 鈥渃ut-and-dry-rule鈥� that can used to assess the risk of insurance hikes, though he noted older high-rises that have made insurance claims tend to have bigger premiums than lower-rise buildings and townhouses.
His advice to buyers is to have a realtor take a close look at the condo documents 鈥� especially the insurance 鈥� before closing a deal to buy.
Rob de Pruis, director of consumer and industry relations for the Insurance Bureau of Canada, said assessments for insurance are based on individual buildings, and increases are determined from the potential for floods or earthquakes, but other factors, like vacancy rates, could also come into play.
De Pruis also noted that Canada鈥檚 insurance industry is facing financial challenges from increasingly frequent and severe disaster claims. He said insurers used to pay $500 million annually for climate-related claims, but the payouts have doubled in the past few years.
dan.ferguson@langleyadvancetimes.com
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