The owners of a historic 19th-century mill in Almonte, Ontario – a building that has been converted into a condominium – claim they feel “penalized” after they saw their insurance rates triple.
Although the building, the Victoria Woollen Mill, was designated a heritage building by the municipality sometime in the 1970s, condo owners reported no issues with their long-time insurer Travelers Insurance – until it came to renew the policy this year.
Travelers informed the insurance broker representing the condo that it would no longer insure heritage buildings. And when the broker tried to find a replacement policy, they were turned down by another dozen or so insurers, mainly due to the heritage designation of the property.
"It certainly feels like we're being penalized because we're in a heritage building. Because people don't want to even consider insuring us," condominium board president Paige Pugh told CBC News.
Fortunately for the condo owners, Economical Insurance stepped up to offer coverage for the property. However, Pugh revealed that their annual premiums have surged, from $11,000 a year to $36,000.
CBC News reported that the condo hosts more than a dozen owners, plus two restaurants. While the $36,000 in insurance fees will be split among the tenants, Pugh said that the premium increase still led to a "substantial increase" in condo fees.
Jason Schooley, who serves as the insurance broker for the mill, explained that insurance premiums are generally on the rise due to the recent string of natural disasters. In this current “hard market” setting, insurers are re-evaluating the cost of offering coverage, especially when heritage buildings are involved, he said. Catastrophic damage to heritage buildings would mean insurers would have to cover for the cost of stone, ironworks and heavy timber.
"The insurance company's really concerned [about] how we're going to replace that and at what cost," Schooley explained.
The Insurance Bureau of Canada (IBC) has responded to the news, saying that it has observed similar situations with other heritage properties in Ontario.
Heritage property owners should coordinate with local and provincial heritage groups to understand which property elements require special care, and then find an insurer with the relevant expertise, recommended IBC director of consumer and industry relations Pete Karageorgos.
But Karageorgos noted that there are now fewer and fewer insurers with the experience and know-how on heritage properties.
"At times, it takes more work and more effort to ultimately find an insurance company that understands heritage properties — and will be willing to underwrite and take on that risk and insure it,” he told CBC News in a statement.
