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Strata Water Deductible Insurance

In recent months, a large number of BC Strata Corporations have seen their Water Deductibles increase significantly. In many cases, these new limits now exceed the limit offered by the insurance carrier covering the individual condominiums.

Why are BC Strata Insurance rates increasing?

Many Strata Corporations in BC are seeing their insurance rates jump anywhere from 40% to 250% this year, according to BC’s Condominium Home Owners Association (CHOA). 

While there are a variety of reasons for these rate increases, the main factors that have led to these spikes are outlined below:

  • The number of Strata insurance claims has increased 
  • Drastic increase in rebuilding costs 
  • Hardening of the Global insurance market, which has impacted Canadian Insurers as well as their reinsurers 
  • Increase in the number of condo/strata developments

Has your Strata’s Water Deductible recently increased?

If your Strata’s Water Deductible has recently increased above and beyond the limit offered under your Condo Policy limit, you may be responsible for the difference between the two limits. The example below illustrates the amount that you could be on the hook for, if you do not have the right coverage in place:

Strata Corp’s Water Damage Deductible $250,000
Deductible Assessment Coverage Under the Unit Owner’s Condo Policy $75,000
Unit Owner’s Responsibility $175,000

How does Strata Water Deductible Buy-Back Coverage work?

While a standard Condominium policy does come with a limit for deductible assessment insurance, it is typically capped at $50,000 – $100,000, depending on your insurance carrier. In many cases though, these Condominium limits are not high enough to cover the Strata Water Deductible.

To combat these increases, InsureBC has developed a policy specifically aimed at closing the gap between the coverage offered by a standard Condominium policy and the limit required by the Strata Corporation, to cover the Water Deductible Assessment exposure. It addresses the exposure after both the building policy and the personal Condominium policy have exhausted their limits so that you won’t be personally responsible to pay the difference. 

Coverage Details

  • Coverage up to $250,000 for Strata Water Deductible Buy-Back Assessment
  • Coverage is in excess of the deductible coverage afforded under the primary unit owners’ policy, and would only be triggered once payment has been made under the underlying unit owners’ policy and the available limits have been exhausted
  • Coverage is available for:
    • Unit owners living in their unit
    • Seasonal condos which are used solely by the unit owner 
    • Units rented to a single family with a signed annual lease
    • BC residents only
  • Coverage is not available for unit owners offering short term rentals of less than 1 year   
  • There is no coverage for Earthquake, Flood, Fire, Rental Income or Additional Living Expenses

What Should You Do As a Condominium Owner?

  • As a Condominium owner, you should ask your Strata Corporation or Property Manager for a copy of the Corporation’s insurance, outlining the various Deductible amounts in place
  • Review your current Condominium insurance policy to ensure it covers the entire Strata Water Deductible amount, in the event of a water loss that originates in your unit 
  • If your policy does not cover the entire Deductible amount, you should purchase stand-alone Strata Water Deductible Buy-Back coverage to ensure you won’t be personally responsible for the difference

By taking the proactive steps outlined above, you could avoid personal financial hardship in the event of a large water loss. Contact one of our InsureBC offices to learn more about our Strata Water Deductible coverage, or get your free quote online.

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