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  • Condo Insurance

    Posted by Karen on April 10, 2022 at 9:16 am

    Fairway 94

    More and more Condominium Corporations are experiencing difficulty in obtaining proper insurance (Part 6 Condominium Property Regulation). Deductibles are climbing. The Alberta government permits deductibles up to $50,000.00 and insurance companies are now submitting quotes or proposals using that deductible limit. Insurance companies are making it known to Condos that any claims may result in non-renewal of policies or huge increases (over 100%) to annual premiums. In recent years our premiums have increased three fold! Some time ago there was a movement in Saskatchewan to establish a “Condominium” owned self insurance corporation. They stated they needed 500 members to make such a venture viable. Has anyone heard any more information on this or does anyone have any input that may help us with insurance in the near future?

    Karen replied 4 months, 1 week ago 1 Member · 0 Replies
  • 0 Replies
  • Karen

    Administrator
    April 10, 2022 at 9:18 am

    GibsonT

    There is a lot of work going on in the insurance area Ron.  Our COF Director Jeremy Dalgliesh is sitting on a multi-stakeholder group that has been meeting monthly.

    Watch for a new survey of Alberta condo owners in an upcoming COF newsletter that will help the multi-stakeholder group get feedback.

    YES: we are well aware of the initiatives from Saskatchewan to explore a self-insuring cooperative.  The problem: You need a world-wide base to adequately diversify the risk.  For example, a coop could not have withstood the Fort MacMurray fire; when the envelope issues hit the lower mainland of BC the warranty insurance program failed.

    We have to recognize that our management of condos is part of the issue.

    Did you know

    • Many insurers were paying out over 100% of premiums to cover claims?
    • 60% of insurance claims are from water in apartments – many caused by poor maintenance?
    • Alberta has been the location for 7 of the 10 largest insurance claims in Canadian history?
    • Climate change has led to more intense storms world wide?

    This is not an easy issue.

    It IS a priority for COF.

    • Karen

      Administrator
      April 10, 2022 at 9:20 am

      Fairway94

      Thanks Terry, I was hoping there would be more of a movement in lobbying the government into some form of regulation. I am fully aware of “claims” and the cost to insurance companies. I firmly believe our governments have to become “partners” in solving the issue as the day will come, and its not that far down the road, where condo corporations will not be able to get insurance. We currently have “good” insurance here however have been forewarned once our building (via appreciation) hits the $40 million mark, we will not be able to get insurance as the industry (this is what they tell us) does not want to “expose” the underwriters to that size of a risk. It is getting difficult to even get several companies to “split” the risk!

       

      • Karen

        Administrator
        April 10, 2022 at 9:22 am

        GibsonT

        I think you have been misinformed about your complex hitting the $40 mark. Insurance brokers frequently insure buildings by retaining a collection of companies to underwrite insurance. Even on smaller complexes, there may be as many as 5 or more underwriters.

        • Karen

          Administrator
          April 10, 2022 at 9:23 am

          Fairway94

          Might be a “scare” tactic however I can assure you we were “not” misinformed. Two brokerages in the Hat have said this to us!

          • Karen

            Administrator
            April 10, 2022 at 9:24 am

            MarkH

            GibsonT (aka TerryG) wrote “We have to recognize that our management of condos is part of the issue.”

            Having observed one condominium for 19 years (mine) and learned about others through attending educational programmes, I can only agree. I’ve learned several points, which may encourage corporations and their boards to change:

            • Preventive maintenance helps reduce premiums (insurance companies consider the quality of board operations) and prevents ‘disasters’, often related to water damage.
            • Pre-emptive cleaning of sewage and drainage systems regularly may look expensive but averts claims and clean-up costs after an event. Recently, our corporation has used a drain cleaner to ensure bathroom and kitchen drains are clear before cleaning out the stacks and the sewer connections to the city facilities.
            • Owners and other occupants need to be aware of their responsibilities and liabilities if they cause problems.
            • Leaving a window open in winter or turning down the thermostat may allow a heating system to freeze and burst, affecting many units at the cost of the owner or occupant of the offending unit as well as the corporation. Our corporation installed bypass valves to ensure a little water flows continuously in the baseboard heating system, even if the thermostat is set to ‘cold’.
            • Turn off a washing machine hose at the wall to prevent a leak affecting units below the offending apartment.
            • Check the overflow outlet on a bathtub – unless it is tight to the tub, water may escape and flood downstairs units.
            • Boards face ever-increasing costs. Deductibles soar, and extreme (weather) events cause greater problems that need to be paid for from insurance funds. Adding a budget item that creates an ‘insurance deductible reserve’ within the operating budget could soften the blow from a catastrophe and avert a Special Levy.
            • Our corporation actively requests copies of owners’ insurance documents to check that owners have adequate coverage, especially for deductibles that the corporation may pass on to owners. I don’t know if this is legal, but it makes sense. I send a copy of my corporation’s insurance to my insurance company and ensure that I have coverage for the big difference between my and the corporation’s deductibles.
            • Some owners believe that the corporation’s insurance covers their unit and their belongings. It doesn’t. Owners and tenants/renters need to get their own insurance.
            • Karen

              Administrator
              April 10, 2022 at 9:24 am

              Fairway94

              Thanks Mark. Your points are well taken. Here at Fairway Village we are “self-managed” and successive boards have been very proactive in preventive maintenance. The buildings are now 22 years old and we have had a couple claims over that time however never due to any of the items you list. We do require owners/residents to provide insurance affirmation to ensure they have proper coverage. We periodically “educate” our owners on many topics, including insurance. Our “Insurance Certificate” (which gets distributed to all owners and residents annually upon renewal) is annotated on the back with the excerpt from our By-laws with the article governing insurance as well as an explanation on deductibles and when and to whom they apply.

              As I mentioned to Terry, the issue of obtaining insurance for Condo Corporations is a growing concern and is anticipated to get much worse. As it is necessary and a legal requirement to have condo corporation insurance, our governments need to be a partner in finding solutions. Human error is always going to be there; there is no cure for “______” (fill in the blanks).

            • Karen

              Administrator
              April 10, 2022 at 9:25 am

              GibsonT

              Thanks Mark!  We may use some of this in an upcoming newsletter.  You are eloquent as always.