Strata insurance in British Columbia has shifted from a question of basic availability to one of competitive pricing, according to Danielle Russell (pictured), national director of real estate at Acera Insurance, who said the conversation in this space has fundamentally changed over the past few years, even as many strata councils continue to misunderstand what their coverage actually protects.
"We're not talking about insurance in the strata space as a crisis anymore," Russell said. "We've pivoted, and we're really talking right now about risk quality."
A few years ago, Russell said, the dominant concern among strata corporations was simply whether coverage could be found at all, alongside the burden of steep deductibles. Today, she said, most stratas can reasonably secure insurance, and the real question has become which buildings can earn the best pricing and terms.
That shift extends across Western Canada, Russell said, though British Columbia experienced a more severe version of the crisis than Alberta did.
"Both are [now] seeing a similar trend, in that we're beginning to see the market shift from a hard market to a much more competitive environment, in BC and all of Western Canada, for multifamily," Russell said. "We're seeing a lot more insurer capacity enter the market, we're seeing a lot more competition, and in many cases we're seeing pretty significant premium and deductible reductions compared to a few years ago."
The root of the original crisis, Russell said, wasn't a single bad year but a sustained period of rising claims that outpaced what insurers were collecting in premiums, particularly around water damage. BC strata buildings specifically went through years of escalating water damage claims and higher repair costs, compounded by construction inflation and a growing number of catastrophic weather events, a combination that eventually forced insurers to correct course dramatically.
That correction, she said, is what created the hard-market conditions strata corporations faced for several years, driven by cumulative claims pressure rather than any isolated event.
"The root cause wasn't one bad year," Russell said.
Since then, Russell said, insurers have reworked their pricing models to a point where writing strata coverage has become profitable again, prompting a wave of capacity back into the segment.
Asked where BC's strata market currently sits on a spectrum from hard to soft, Russell didn't hesitate.
"It is probably one of the softest commercial line segments at the moment," Russell said. "It has been for almost a year now, and I'm not seeing signs from the insurance companies of that changing yet."
The clearest signal that conditions could eventually shift back, she said, would be claims costs once again outpacing premium collected, a pattern she isn't currently seeing.
"That's the marker we'd be looking for again, in combination with global factors, including cat losses," Russell said. "We're not quite in that place yet, in my opinion."
Even as the market has softened considerably, Russell said one misunderstanding continues to surface among strata councils and owners regardless of pricing conditions: the assumption that a strata's insurance policy protects individual unit owners directly.
"Many council members are surprised to learn that strata insurance is really building insurance."
Owners still need their own separate policy to cover contents, upgrades, additional living expenses, personal liability, and potentially large deductible assessments passed down from the building's master policy, Russell said, a gap many only discover after they've already suffered a loss.
Part of the problem, she said, is that councils tend to focus heavily on premium cost rather than the underlying details that actually determine how well a policy performs when it's needed.
"We see councils are focused heavily on premiums, and they're not paying as much attention to coverage wordings, appraisals, risk management, deductible structures," Russell said. "Their focus on the cheapest policy is not always the most effective."
Despite the improved market conditions, Russell cautioned that a softer market can create a false sense of security for strata corporations, particularly if it leads to reduced investment in prevention.
"It is easy in a competitive landscape like this, where a strata is receiving a premium reduction, to not put focus on insurance and to not put focus on loss prevention and risk mitigation," Russell said. "It's come in below budget, and it feels like a success and a checkmark."
Water damage remains the leading cause of loss in strata buildings, she said, and buildings that scale back on maintenance, leak detection, and community education while conditions are favourable risk undoing the progress that helped stabilize the market in the first place.
"These improving insurance rates won't continue if we go back to a situation where claims paid is outpacing premiums collected," Russell said.
Ultimately, Russell said the strongest strata corporations are the ones that treat insurance as an ongoing discipline rather than a once-a-year transaction to check off a list.
"Don't think about insurance as something you buy once a year," Russell said. "Think about it like the report card on how your building is managing risk. The best outcomes come when councils, property managers and insurance advisors are working together year-round to reduce losses before they even happen."
