Residents of Abbotsford’s tallest building, the 26-story Mahogany Tower on Gladwin Road, saw their insurer hike their premiums by 780 per cent this year.
Mike Pauls, the president of the building’s strata council, said the stata was shocked when they saw their insurer, BFL, had raised their rates from $66,000 in 2019, to $588,000 in 2020.
Pauls said the increase is going to significantly impact the condo owners. That premium would be a one-time levy of $3,000 per unit, along with doubling the monthly strata free to $600.
BFL told the strata the increase was due to fewer insurance underwriters willing to share the risk of a $79 million building.
Pauls said he would understand a substantial premium hike if construction or repairs were needed, but Mahogany Tower is brand new and has only been occupied for a year.
After the strata instructed the building manager to go back to the insurer to get a better offer, BFL offered a premium with reduced coverage for $241,000.
Mahogany Tower is the latest building to be hit with a massive insurance jump in B.C this year. A three-year-old Langley building saw their premiums go from $97,000 in 2019, to $371,000 last week.
Risk 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, said Rob de Pruis, director of consumer and industry relations for the Insurance Bureau for Canada.
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.
Pauls said it’s unreasonable for these costs to be shouldered by average property owners who live on a fixed income. He said the strata council has written a letter that it intends to send to the local, provincial and federal government.
He said the government needs to step in and investigate what exactly is driving the prices up.
A spokesperson for the B.C. Ministry of Municipal Affairs and Housing said insurance costs for stratas are increasing across country and the province is working with the private industry to make ensure affordable coverage is available in the face of the climate challenge.