Residents in an iconic condo in Victoria got quite a shock Thursday as they found out the cost to insure the building has jumped hundreds of thousands of dollars.
According to residents, the Shoal Point building in James Bay used to be insured for around $200,000 but that has skyrocketed to $800,000.
Some say they expected a hike but not as high, while others say it came out of the blue.
Experts say this is part of a new trend.
“For a period of time premiums were probably under what they should have been,” said Tony Zarsadias of the Condo Group.
“When prices have been low and they need to make some margins for these insurance companies to actually be profitable, they tend to overcompensate so we are seeing a big swing in some cases.”
The biggest problem is that higher insurance costs will be passed directly to condo owners in the form of higher strata fees.
“We have a significant number of homeowners who are on pretty tight budgets in a lot of our retirement communities,” said Tony Gioventu from the Condominium Home Owners’ Association of B.C.
“As these increases come up it’s going to become very difficult for them to manage an affordability level.”
But not everyone can expect to see a 300 per cent jump like at Shoal. Experts say on average, condo insurance will increase about 20 per cent.
“It’s occurring to older condos I would say something in the mid 1980s and lower, that’s where you are going to see the risk of higher insurance premiums coming up,” said Zarsadias.
“But newer buildings especially, especially buildings that have been really well kept, are very at a much lower risk for high rates of insurance increases.”
But the Shoal point building is pretty new, built right around the year 2000.
Residents say back in November a pipe broke, and there have been some other maintenance issues.
The increase is a trend that has hit the Lower Mainland especially hard.
Earlier this week a private member’s bill was introduced by the B.C. Liberals, suggesting a few minor tweaks to try and ease the crunch, but whether the province will actually step in, remains unclear.
Some condo owners say the best thing the province could do is put in a mandatory notice period.
Usually, sratas approach insurers and can find out as close as the day before they renew that their rates will skyrocket, or that nothing is available.
The change would allow for them to shop around. Suggested in the member’s bill is a 30 day period.
The B.C. Ministry of Finance sent a statement from minister Carole James, that says:
“We understand the serious financial implications that some of these reported insurance rate hikes on strata properties are having on people in our province. While these price increases are driven by dynamics in the private insurance industry, we’re working on a number of options and welcome any ideas that might help make life more affordable. We have asked the British Columbia Financial Service Authority (BCFSA) to monitor the situation carefully and ensure we are doing everything we can to financially protect British Columbians.”