Condos are now the way many people get into B.C.’s expensive real estate market but a condo insurance crisis means the multi-billion-dollar market’s future is up in the air.
“There’s no question it’s a big concern,” says realtor Tony Joe of RE/MAX Camosun. “There is a fair amount of uncertainty and people are scared.”
Recent changes to insurance rates mean some buildings — especially older ones, ones with pricey claims or deferred maintenance — are no longer able to get insurance.
“It means there’s no buying or selling or re-mortgaging,” says Tony Gioventu of the Condominium Home Owners Association of B.C. “It means if any loses in the building small or large everyone is going to be paying the price for it.”
Banks won’t finance uninsured buildings so sales are already falling through.
In many cases, the strata corporations are finding out the day their insurance expires that it won’t be renewed, leaving the buildings without any insurance at all — including liability insurance in case someone slips or falls.
For those that can get insurance, costs are sky-rocketing.
“Their policies have increased 300 to 500 per cent and their deductibles have gone generally from $25,000 to $50,000 to $250,000 to $500,000,” Gioventu explains.
As insurance companies struggle to keep up with global disasters, some are pulling out of B.C. altogether.
The condo insurance crisis is prompting dire warnings the market could collapse unless the province steps in.
The finance ministry says higher construction costs and real estate prices, along with climate change and weather-related incidents are to blame.
The province says it’s working on the problem.
But with properties on Vancouver Island already affected, realtors says it’s buyer beware.
“One of the biggest things is buildings do need to make sure stay on top of their maintenance and making sure they don’t bump into problems,” Joe advises. “That’s the way to safeguard against potential insurance claims.”