Condo insurance rates are rising tremendously and will continue to rise in 2020, with many owners and renters calling for an affordability crisis.
Alberta has been hit exceptionally hard, as some rates have risen almost 700%. According to REIN Senior Research Analyst Don R. Campbell, the property insurance industry has started to undermine the financial benefit of multi-family properties through dramatic insurance cost increases, huge deductible increases, and new demands on owners and renters. “These costs and policy changes will undo ANY of the positive momentum that so many have worked hard to start,” says Don.
While it’s challenging to determine the exact reason for the dramatic increase, Park Insurance Commercial Department Manager Chris Westrop says issues such as weather disasters, reduction of capacity for insurers in the commercial market, high claims and maintenance issues could be contributing to the increase. (Source: Thompson’s World Insurance News)
According to REIN CEO Patrick Francey, the deductible on one of the buildings he owns in went from $50k to $225k, while rates for insurance have increased a whopping 50%. “It should be noted that owners need to make sure their personal unit insurance covers the first $50K of building deductible,” says Patrick. “Should a large claim originate in your unit – for example if a flood causes $275K damage – you are responsible for the first $50K of building/strata deductible… make certain you are insured.”
Have you experienced insurance rate increases firsthand? What do you think can be done to reduce rates in the future? Share your opinions and experiences with us in the comments!