Availability of Insurers and Rates
Multi-family dwellings continue to experience the most significant insurance capacity challenges as we head into the second half of 2019. At the end of 2018, we started to see insurance companies require increased insurance rates for strata and condo business
There were two main reasons behind these increases
1. Increased catastrophe related claims affecting the global community. Incidents such as hurricanes and wildfires are on the rise. Most, if not all, insurance companies were affected which forced them to examine their lines of business with more scrutiny.
2. Increasing poor performance for the strata and condominium sectors. With more scrutiny being deployed into the strata/condo market, insurers are continuing to examine performance.
Updated 2018 Industry Statistics
Residential Real Estate at a Glance
Impact on Insurance Companies
With declining performance, insurance companies continue to review their business and make changes to their guidelines to improve performance and reduce risk.
Strict Underwriting Standards
Insurers tighten their underwriting guidelines needed to rate risks accordingly. ie: If a property is over 25 years old, when was the roof replaced? If never, a surcharge may apply.
A larger premium base is required for insurers to continue to support the strata/condo industry.
Higher deductibles are being imposed both as a minimum and for properties with loss experience.
Building construction is examined and rated accordingly. Wood frame properties are seeing higher increases due to a rising trend in large fire losses for this class of building.
To Reduce Risk
Reduce Exposure, Insurers reduced their overall exposure by restricting their involvement, especially in high hazard areas.
Withdraw from Writing Business
We have seen several insurance companies withdraw from writing strata and condo business meaningless selection in the broker process.
What this means to Strata and Condo Corporations
A continued increase in premiums and deductibles into 2020. Possible delays receiving quotes as we canvass the insurance market for the absolute best terms available.
For more information please visit: bflrealestate.ca