A 26-storey condominium in Abbotsford, BC has been rocked by astronomical increases to its insurance premiums – a 780% increase from its rates last year.
BFL, which insures the aforementioned Mahogany Tower, raised the property’s rates from $66,000 in 2019 to a mind-boggling $588,000 in 2020.
Mike Pauls, president of the building’s strata council, said that the increase will affect condo owners in the form of a one-time tax of $3,000 per unit. This does not include the additional monthly costs of $600.
The insurer explained that the increase was due to fewer insurance entrepreneurs willing to share the risk of insuring the high-rise building, which is valued at $79 million.
Pauls responded to the insurer, saying that he would have understood a significant increase in premiums if the property was in need of construction or repair. However, the Mahogany Tower has only been occupied for a year.
Surrey Now-Leader reported that the strata council instructed the building manager to approach BFL for a better offer. The insurer has since offered a lower premium of $241,000 – but with reduced coverage.
Condo insurance prices all over Canada are experiencing significant leaps in rates thanks to severe weather events in recent years. Industry stakeholders and experts cautioned that if this issue persists, the costs may soon be unsustainable.