BC government tables legislation to address rising strata insurance costs

BC government tables legislation to address rising strata insurance costs | Insurance Business Canada

BC government tables legislation to address rising strata insurance costs

To help control soaring strata insurance costs that are impacting local condominiums and their owners, the BC government has tabled legislation that amends laws involving stratas.

In a statement, the provincial government said it would change the Strata Property and Financial Institutions acts, creating changes that would accomplish the following:

  • Eliminate referral fees between insurers or brokers and property managers or “other third parties.”
  • Establish “clear guidelines” for what stratas need to insure.
  • Require strata corporations to inform owners about their insurance coverage, any changes to their policy (including increasing deductibles) and allow the strata to use its contingency fund to pay for any “unexpected” premium increases.
  • Protect unit owners from “large” lawsuits from the strata “if the owner was legally responsible for a loss or damage, but through no fault of their own.”

The legislation was tabled Tuesday, CBC News reported. Officials said that the Bill 14, Municipal Affairs and Housing Statutes Amendment Act (No.2), could face further amendments after consultations with other stakeholders. Those changes may include requiring brokers to disclose their commissions and closing loopholes that allow stratas to withhold depreciation reports about a strata building’s condition.

The government’s decision has been received warmly by the Insurance Bureau of Canada (IBC), which had been advocating for legislative change to address the issue as far back as February.

Read more: IBC shares policy recommendations to address B.C.’s strata insurance issues

“IBC applauds government for introducing these reforms, many of which mirror recommendations IBC and others have provided to help improve the risks facing strata corporations in BC,” said IBC Pacific vice-president Aaron Sutherland, who added that the bill is “an important first step” to improve governance over the province’s strata corporations, increase transparency in the market, and introduce best practices from other Canadian jurisdictions.