A look at whose insurance policy pays on strata property
With the high cost of single-family homes in BC and the increased availability of attractive, lower-cost condominiums, more and more people are choosing to buy townhomes and apartments. From a home insurance perspective, condominium owners have some unique considerations. Here’s a closer look.
The complicated scheme of common property, shared ownership, and multiple insurance policies can make it difficult to determine who is responsible for the cost of repairing damage within a suite.
The Strata Property Act states that insurance deductibles are a common expense. However strata corporations may sue an owner to recover the deductible portion of an insurance claim whether or not the owner is responsible for the loss or damage, as long as the damage can be shown to have arisen from that suite or pipes associated with that suite. These water damage deductibles typically range between $10,000 and $25,000, but can go as high as $250,000.
Most Unit Owner Condo insurance policies automatically provide $25,000 deductible reimbursement coverage, but some offer less and therefore, additional limits must be purchased. Suite owners must ensure that their strata building deductible reimbursement coverage is adequate.
The property manager of your building can provide a one-page summary of the building’s insurance, which your Murrick insurance agent should review each year to ensure you have adequate coverage, particularly for deductibles for which you might be responsible.
Individual condo owners must purchase insurance for their own suites. Unit Owner Condo Coverage insures personal property, suite improvements and betterments, loss assessments, personal liability, and strata building deductible reimbursement.
Water damage is the single largest reason for condo insurance claims. As many as 70 percent of strata building and unit claims are now the result of water damage, whether arising from broken pipes, malfunctioning appliances, or overflowing sinks, toilets, or bathtubs. These increased claims have resulted in higher strata building insurance rates and water damage deductibles.
Strata Corporations’ Insurance Responsibilities
Under the BC Strata Act, strata corporations must insure the building, including the original fixtures — drywall, original flooring, original kitchen cabinets — within all suites; as well as common property, including areas such as the lobby, hallways, stairwells, and portions of the floors and walls which comprise the overall structure of the building.
Please review your policy limit and if you feel you are not adequately covered, or simply wish to discuss your coverage, contact your Murrick Group insurance agent.
By Danielle Carolan, BA, CRM, Commercial and Personal Lines Manager, Murrick Insurance Services