Rob Parker said there wasn’t much advance notice of a big insurance premium hike at the 95-unit Prestwick townhouse complex in Langley’s 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.
“Monday (March 23rd), that was the deadline,” 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’t been going well, and he is worried if the increase goes through, it will be too much for certain owners.
“Some of the people won’t be able to afford it,” Parker predicted.
Prestwick is about two years old, and has never filed a claim, Parker told Black Press Media.
“We’re a brand-new building.”
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.
“We didn’t change from a concrete building to a wood building,” Parker remarked.
He said another broker 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’t set insurance rates.
“We are independent insurance brokers, we don’t fix the price or set the premium,” said Adam, BFL vice-president, communications.
“The insurance companies who we work with on behalf of our clients determine the price / premium, not us.”
Several other condo projects have seen sudden jumps in their insurance costs in Langley 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’s insurance premium was going to rise from $97,000 to $371,000.
READ ALSO: VIDEO: Insurance shock for Langley condo owners
At Abbotsford’s tallest building, the brand-new 26-storey Mahogany Tower, the insurer raised premiums by 780 per cent.
Mike Pauls, the president of the building’s 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
Langley realtor Corbin Chivers called the rise in premiums a “strata insurance crisis” 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.
“In 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,” Chivers said.
Chivers said there is no “cut-and-dry-rule” 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 — especially the insurance — 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’s 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.comLike us on Facebook and follow us on Twitter
