Buyers Stepping Back, Insurance Already Chilling Market

[misher]

Originally Posted by SpongeG

I don't understand how a petition will do anything but good luck

New West condo owners launch petition in response to insurance crisis

By Theresa McManus, New Westminster Record | February 19, 2020


Residents of the Anchor Pointe strata, including (from left) Peggy McNeil, John McNeil, Bruce Campbell, Wesley Hartford, Asifa Lalji and Isaac Bull, are facing a 300% increase to their insurance premiums this year. Lalji,in plaid, has spearheaded an online petition that's been signed by nearly 1,500 people | Photo: Jennifer Gauthier

Soaring insurance premiums are causing panic among some condo owners.

Asifa Lalji, who owns a condo in Anchor Pointe at the Quay, said her strata had been anticipating increases to their insurance rates, but it turned out to be far worse than anyone imagined.

“We thought we were going to get a 40% increase in our insurance for our building, which would then translate to an increase in our maintenance fees,” she said. “Then January rolled around, when our insurance for the building actually came due, and we found out instead of a 40% increase that we had budgeted for, we actually ended up with a 300% increase.”

Lalji said other stratas in the area are facing similar increases, which could result in increased maintenance fees and/or special levies – something many residents may not be able to afford. She said the increases are particularly challenging for seniors and people with disabilities.

“Having a hit like that – where does the money come from? You dip into your savings, you dip into your home equity lines. There is no fiscally responsible way to cover these costs,” she said. “What do you do when all of a sudden you have like a $150 or $200 increase to your living expenses every month?”

Bruce Campbell, Anchor Point’s strata president, said a 40% hike in insurance premiums would have seen in his monthly strata fees rise to about $480 a month, but it’s now more than $600.

“People are obviously in a panic and a crisis mode at this point in time,” he said of the 300% increase. “They just don’t know what is going to happen, what the rates are going to be next year.”

...

https://biv.com/article/2020/02/new-...surance-crisis

Strata act and building codes need serious overhaul. Hopefully this pushes action. Vancouver and provincial building code does not create reliable low maintenance buildings. Who the hell doesn’t have a drain in the bathroom.

[rofina]

It seems like high rise's are hardest hit, which makes sense considering replacement cost and potential for massive damage in a flood is outsized.

That being said, we are also actively pushing for density via high rise anywhere available, the two together really create a mess.

Particularly when you consider that;
- Build costs are increasing at double digits annually - locally at least.
- Climate events are not likely to decrease in severity.
- Density is increasing globally, as people continue to cluster in cities. Flooding 1 block used to affect 20 policies. Flooding one block today could affect 1000 policies.

Curious to see what the ultimate solution here is. This is a big problem that is affecting a lot of people.

[WarrenC12]

Originally Posted by rofina

Curious to see what the ultimate solution here is. This is a big problem that is affecting a lot of people.

It is but the money being paid in insurance companies was already high. Super high deductibles are fair IMO and will "solve" the problem. It does mesh with one of the reasons this is happening is the lack of income these companies are receiving on their investments.

One building I'm familiar with has paid $130k premiums for about 7 years. They had one claim a few years back for a flood that was around $280k all-in I believe, flooded several units.

I believe this is relatively typical, and the insurance company is still making plenty.

Floods come from morons leaving taps on and pipes bursting, this isn't Venice (yet).

[misher]

Originally Posted by WarrenC12

It is but the money being paid in insurance companies was already high. Super high deductibles are fair IMO and will "solve" the problem. It does mesh with one of the reasons this is happening is the lack of income these companies are receiving on their investments.

One building I'm familiar with has paid $130k premiums for about 7 years. They had one claim a few years back for a flood that was around $280k all-in I believe, flooded several units.

I believe this is relatively typical, and the insurance company is still making plenty.

Floods come from morons leaving taps on and pipes bursting, this isn't Venice (yet).

Had one that made claims of 20-40k weekly and some close to a million on a $25k deductible. Totaled over a mil on a premium of less than 200k for that year. This big restoration company's boss who I gave the work to suddenly knew my name and greeted happily me the next time we met. Apparently I kept a third of his company busy for 6 months. Needless to say their deductibles and premiums increased by more than 200% the next year.

This is why you don't buy into an Onni building. After a few years they just come apart like a sand castle when the tide comes in.

[WarrenC12]

Originally Posted by misher

Had one that made claims of 20-40k weekly and some close to a million on a $25k deductible. Totaled over a mil on a premium of less than 200k for that year. This big restoration company's boss who I gave the work to suddenly knew my name and greeted happily me the next time we met. Apparently I kept a third of his company busy for 6 months. Needless to say their deductibles and premiums increased by more than 200% the next year.

Weekly?! WTF is going on there?

$20-40k on a $25k deductible? That doesn't even make sense.

[misher]

Originally Posted by WarrenC12

Weekly?! WTF is going on there?

$20-40k on a $25k deductible? That doesn't even make sense.

Correction 30-40k*

And yeah its like the building hit an end of lifetime wall and everything just suddenly started backing up or leaking. Elevator started constantly breaking down, parkade membrane was failing in areas, roof started leaking, fire panel kept having random errors, even the pool boiler needed a new heat exchanger. We even had a few fires! Not just one!

The fire department generously came in and required us to correct/add a bunch of things. When we inquired why these weren't done when the building was built and the fire department inspected it they said the inspector probably missed them.

I swear I have no idea how Onni gets away with a lot of things. No idea if the inspectors are just rushing their job or are on the take.

There's a building in Richmond that starts with F which is missing its roof anchors on one side.

[misher]

Horgan just announced the NDP will do their best to help.

Prepare for a new insurance tax because that’s the only language the NDP knows.

[trofirhen]

Originally Posted by misher

Horgan just announced the NDP will do their best to help.

Prepare for a new insurance tax because that’s the only language the NDP knows.

That is probably true, and many people would not want that either. Given the situation, what method would you suggest to raise the funding?

[misher]

Originally Posted by trofirhen

That is probably true, and many people would not want that either. Given the situation, what method would you suggest to raise the funding?

No funding needed there’s so many ways that the government can change laws and the building code to help.

For existing stratas simply giving more power under the strata act is an obvious one. Require that owners provide a key in case of emergencies, allow stratas to force owners to upgrade to braided supply lines, and stop charging taxes on commercial stratas.

[rofina]

Originally Posted by misher

Correction 30-40k*

And yeah its like the building hit an end of lifetime wall and everything just suddenly started backing up or leaking. Elevator started constantly breaking down, parkade membrane was failing in areas, roof started leaking, fire panel kept having random errors, even the pool boiler needed a new heat exchanger. We even had a few fires! Not just one!

The fire department generously came in and required us to correct/add a bunch of things. When we inquired why these weren't done when the building was built and the fire department inspected it they said the inspector probably missed them.

I swear I have no idea how Onni gets away with a lot of things. No idea if the inspectors are just rushing their job or are on the take.

There's a building in Richmond that starts with F which is missing its roof anchors on one side.

I worked on a project where we couldn't get permits on a commercial unit in a finished and occupied building, because all the CRU's did not meet code. We literally had to do significant base building upgrades on a new building to bring it to minimum code to allow the BP process to proceed on the TI.

How does that even make sense? The consultants and inspectors would have literally just done occupancy walkthroug's a couple months before.

Some of this stuff is a really shameful sham.

[CanSpice]

Originally Posted by misher

Prepare for a new insurance tax because that’s the only language the NDP knows.

[rofina]

Originally Posted by WarrenC12

It is but the money being paid in insurance companies was already high. Super high deductibles are fair IMO and will "solve" the problem. It does mesh with one of the reasons this is happening is the lack of income these companies are receiving on their investments.

One building I'm familiar with has paid $130k premiums for about 7 years. They had one claim a few years back for a flood that was around $280k all-in I believe, flooded several units.

I believe this is relatively typical, and the insurance company is still making plenty.

Floods come from morons leaving taps on and pipes bursting, this isn't Venice (yet).

I don't have an issue in principal with 6 figure deductibles, as long as you can get insurance on the deductible.

The issue I see is with an inordinate amount of strata budgets having to go to insurance, and also with private insurers not wanting to insure 6 figure deductibles.

I still don't see how the government can help here. Another tax on new buildings to fund a private insurance fund? Not sure.

[WarrenC12]

Originally Posted by rofina

I don't have an issue in principal with 6 figure deductibles, as long as you can get insurance on the deductible.

The issue I see is with an inordinate amount of strata budgets having to go to insurance, and also with private insurers not wanting to insure 6 figure deductibles.

I still don't see how the government can help here. Another tax on new buildings to fund a private insurance fund? Not sure.

Regarding claims, information obscurity and the black box of actuary tables have been an issue. Buildings are not given any warnings about how their premiums might increase when making claims. For years, premiums hardly increased at all when claims were made. Annual premiums appeared the same after years of several claims, or no claims at all.

Compare that to ICBC and it's graduated list of increases or decreases. I have a pretty good idea how much an accident will "cost me" if I make a claim, vs. pay out myself.

Competition could also be our saviour too. Don't we have federal regulations that prohibit banks from being directly involved in aspects of insurance? I'm no expert here, but I'm betting RBC and the others would be licking their chops to get a piece of this insurance business.

[Cypherus]

As a valid response to the insurance crisis, our high rise building is going to commence with a capital expenditure to install automatic water shutoff detectors in every unit. We can't afford another flood.

We already had to pay a special levy assessment just because of the higher strata insurance premiums proposed for 2020. BFL (our insurer) was laughing all the way to the bank with their bogus rationale.

[rofina]

Originally Posted by Cypherus

As a valid response to the insurance crisis, our high rise building is going to commence with a capital expenditure to install automatic water shutoff detectors in every unit. We can't afford another flood.

We already had to pay a special levy assessment just because of the higher strata insurance premiums proposed for 2020. BFL (our insurer) was laughing all the way to the bank with their bogus rationale.

Misher has a valid point, its a shame these systems are not already in place in newer builds. Along with floor drains in bathrooms.

Most of these principles are in place in commercial/office buildings. Its not like we need to rethink the whole building process here, minor tweaks along the way could have prevented much of the issues we see today.

[misher]

Originally Posted by rofina

Misher has a valid point, its a shame these systems are not already in place in newer builds. Along with floor drains in bathrooms.

Most of these principles are in place in commercial/office buildings. Its not like we need to rethink the whole building process here, minor tweaks along the way could have prevented much of the issues we see today.

Thank you.

Originally Posted by Cypherus

As a valid response to the insurance crisis, our high rise building is going to commence with a capital expenditure to install automatic water shutoff detectors in every unit. We can't afford another flood.

We already had to pay a special levy assessment just because of the higher strata insurance premiums proposed for 2020. BFL (our insurer) was laughing all the way to the bank with their bogus rationale.

I've heard bad things about these detectors but wish people the best of luck.

BFL is the company I recommend to everyone. Insurance brokers are on commission so most of what you pay would be going to the insurance companies. You will hear the same insurance increase story from every strata insurance broker its not "bogus" and is happening across the nation. Claim payouts have been much higher than the money stratas overall are paying so many insurers are leaving the industry. Of course as you pay more the commission will go up, but BFL is also doing a lot more work to lock down policies now. The only decent alternative to BFL is CMW.

[misher]

Hopefully a sign that the Liberals are taking a new direction towards being a decent government. I'm not sure how they will ensure that stratas get renewal terms 30 days in advance though, would be nice but companies are already backing out of the market so putting more pressure on them would be a mistake. The last (liability insurance) is sorely needed.

B.C. Liberals propose legislation aimed at easing strata insurance crisis
“Simple, easy-to-apply” measures would define insurance responsibility and let homeowners earn financial breaks, says MLA Todd Stone

According to the B.C. Liberal Caucus, the bill proposes that the Strata Property Act:
• adds new definitions to ensure correct insurance-product pricing and greater clarity in the claims process;
• requires a strata corporation to provide a copy of proof of insurance;
• requires that strata corporations be provided insurance renewal terms at least 30 days in advance; and
• requires an owner of a strata lot to obtain and maintain liability insurance.

Stone is also calling on the government to launch a water-damage prevention program, which would offer financial incentives to homeowners making upgrades to their plumbing and appliances.

Stone told media that while these measures would not be a cure-all for the strata insurance crisis, they would help strata corporations provide clarity on risk to their insurance providers, which may mitigate the increase in their premiums. “It’s not going to solve the problem in itself, but it is a step that can be taken that could apply some downward pressure on insurance premiums,” he said.

Tony Gioventu, executive director of the Condominium Home Owners Association of BC, said in a statement, “While a private member’s bill is often met with a number of barriers, Todd Stone bringing the proposed changes to the Legislature for consideration will help raise the profile on the seriousness of this issue. This isn’t just about large corporate interests and risks, the individual homeowners are feeling the effects deep in their pocketbooks and increased exposure to high rates and deductibles.”

https://www.vancourier.com/b-c-liber...sis-1.24084019

[misher]

The problem with taxes on strata insurance just like gas, when prices rise the tax is % based so it multiplies any increase. Dropping the tax or setting it at a fixed amount will not make a "big" difference, but it will make a minor one.

There aren’t many levers she can pull to drag private sector insurance rates back down. One direct input the provincial government has on strata insurance premiums is a tax that’s applied to them.

It’s 4.4%, charged on the companies, and opposition Liberals accused the NDP government of making a windfall off the skyrocketing premiums that insurance companies are charging some strata councils.
Reading letters from upset condo dwellers, opposition critics said the government will make an extra $15 million this year via the tax, and $75 million more over the next three years.

https://www.vancourier.com/les-leyne...ing-1.24089844

[misher]

Unfortunately proposed BC safety requirements will increase costs signifigantly for elevator contractors...to be passed on to the customers. Stratas will get a letter in the mail over the next 6 months. Every elevator company is up in arms over the proposed changes which will drastically reduce the life expectancy of the elevator. Its a bigger change than the mandatory annual emergency brake test that required everyone replace their sheave jammer (which was never designed to be used more than once).

I'm not an expert and these haven't been finalized yet so I won't go into details. Just take it as another day of the government making your life more affordable.

[whatnext]

Remember the condo insurance crisis? It hasn't gone away:

One-two punch: COVID-19 compounds B.C. condo insurance crisis
Author of the article:Lori Culbert, Dan Fumano
Publishing date:2 days ago

Metro Vancouver condo buildings are being forced to spend an average of 65 per cent more on insurance premiums in 2020, new data suggests, providing the first statistical glimpse into the extent of the financial crisis hitting owners in multi-unit buildings.

Postmedia has been documenting for months the plight of condo owners facing either massive premium increases, or policies that will not be fully renewed because insurers are losing their appetite for the B.C. condo market. It is a major concern across the province, but especially in Metro Vancouver, where about a third of the population lives in condos — the highest rate in the country...

https://vancouversun.com/business/ex...surance-crisis