Statement by Anchor Pointe Insurance Task Force in response to BC Financial Services Authority report on strata insurance released June 16, 2020
The interim report issued today by the BC Financial Services Authority confirms our overall conclusion that strata insurance in BC, is unaffordable and unsustainable.
We are also pleased to read the BCFA agrees this is a complex issue and requires all stakeholders to work together to develop an effective solution.
We were disappointed the data was compiled soley from the insurance industry and only a small, random sample was used. Based on the input from strata owners supporting our petition, we agree with the Condominium Home Owners Association that the average increase to premiums is more than 40%.
However, the data details and breakdown of risk factors confirm there is inconsistency in the criteria and pricing for each building.
The Best Terms Pricing structure appears to create a 'silent collusion' between underwriters which is clearly an unfair business practice.
We are very concerned the provincial and federal government will support measures to keep the insurance industry viable because of the concern they will pull out of the strata market.
Strata owners should not be subject to unaffordable premiums and unreasonable liability around risk areas the insurance industry wants to avoid. The strata owner can't keep the insurance industry profitable by assuming all costs associated with the underwriters' risk formula.
We are aware of some of the suggestions the insurance industry is promoting. While these make sense for the insurance industry to be sustainable and profitable, it ultimately redirects the financial burden for certain claims, repairs, legal resolution and costly building retrofits onto the strata owners.
It is disheartening to see the timeline and warnings of 'no quick fix' to this situation. Media reports on this issue came out in November 2019. It's taken six months to confirm what strata owners have been voicing. If the final report isn't released until Fall 2020, it will be a full year where strata owners will have to absorb the costs and liability resulting from these unfair premiums.
Given the ability for government to intervene financially during unprecedented times, as demonstrated by Covid-19 response, this is the optimal time to offer strata owners financial support to keep housing affordable and keep the condo market sustainable. Using the BCFA data, 6% of strata corporations have seen an increase of over 100% in building insurance premiums that will need to be paid for by the strata owners. At minimum, those strata owners should see direct financial support.
Allowing this situation to go on will have a devastating effect for the strata owners, particularly seniors, people with disabilities and those hardest hit with the financial effects of the pandemic.
We urge the government of BC to develop a short term financial solution for strata corporations hit with excessive increases to premiums, protection for those strata corporations unable to secure full coverage for the building, and review all conditions imposed by insurance companies in order for strata corporations to secure insurance this year.
In our opinion, this report illustrates an unfortunate lack of oversight and understanding by government ministries and agencies responsible for regulating this essential product for home ownership. There is an imbalance of perspective in favour of the insurance industry and we will continue to make the voice of the strata owner heard.
We are hopeful the consultations are comprehensive and balanced so they offer solutions that will support strata owners and keep the strata residential market healthy.
The Anchor Pointe Insurance Task Force is made up of a group of strata owners based out of New Westminster that started a petition in February raising awareness of the unfair and unprecedented increases to strata insurance premiums and liabilities to homeowners. The petition is available here http://chng.it/cvKzQGVD and at the time of this statement had more than 12,800 signatures.
The group posted a summary in April :
https://drive.google.com/file/d/1szDI5DWjl_dr-nszWapA-yhMAgIJaPK0/view?usp=drives