What You Need to Know About Strata Insurance

For decades, CapriCMW have served as trusted advisors to strata corporations and property management companies throughout BC.
Categories: Business Insurance
Dec 11th, 2017 | By: Dani Waters Russell

For decades, CapriCMW have served as trusted advisors to strata corporations and property management companies throughout BC. During that time, our dedicated Risk Advisors have helped numerous strata councils and property managers clear their confusion around BC's strata insurance requirements. They have compiled a list of the most common questions they receive and provided clear, succinct answers below.

What does the Strata Property Insurance include?

In accordance with the Strata Property Act, the strata insurance policy provides property coverage for Common Property, including any buildings shown on the strata plan, the common assets and any fixtures built or installed on the strata lot by the developer as part of the original construction of that strata lot.  Owners also need a separate Condominium Owners insurance policy which provides coverage for your contents, improvements and betterments, deductible assessment and additional living expense and personal liability.

Who do I contact in case of a claim such as a fire or water damage?

In the event of a fire, please contact the fire department as soon as it is safe to do so.  In the event of water damage, please contact your Property Management Company (or Strata Council if you are self-managed) and advise of the emergency.  Your property manager will arrange for a restoration company to attend, and complete their emergency services. It is important to note that the strata policy permits all emergency work to be completed without insurer/adjuster approval.  Your property manager will advise your CapriCMW Risk Advisor of the claim at their earliest opportunity, and an adjuster will be assigned at that time. Your property management firm will have after-hours emergency services and CapriCMW also has after-hours emergency claims support at 604 294 3301.  Please also notify your personal insurance provider of the loss or damage as soon as possible.

If I rent out my unit, do I still need Unit Owners Insurance?

Yes, you will still need a separate insurance policy providing coverage for any improvements and betterments, deductible assessment, liability, and loss of income coverage.  

Why do tenants need their own insurance?

The strata insurance policy only provides coverage to the original structure and liability insurance for the strata corporation.  Tenants need coverage for their own contents and liability exposure.  In the case of a loss, many owners and tenants under-estimate the amount of their belongings such as clothing, furniture, jewelry, electronic and so forth.

What is an insurance broker, and how is it different than an insurance company?

CapriCMW is a broker, which means we are an independent firm who acts on your behalf negotiating and placing business with insurance companies. As your broker, we approach all of the major insurance companies in the Canadian marketplace to ensure that our strata program rates and terms remain the most competitive available. We obtain multiple quotations on the strata’s behalf.

What is a deductible?

A specified amount of money the insured must pay in the event of a claim before the insurance company will pay for a claim covered by the strata’s policy.

My strata’s deductible for water damage is $10,000. What coverages do I need?

You need Loss Assessment coverage of $10,000 in the event a loss originates from your unit, you may be responsible for paying the deductible.  You also need Unit Additional Protection coverage in the event there is loss or damage to your unit which does not exceed $10,000 and therefore is not enough to trigger the strata's insurance.

How is the strata's earthquake deductible applied?

For all insurance policies, the deductible is a percentage of the building value,  not the value of the damage.  For example, a $10,000,000 building with a 10% deductible would have a $1,000,000 deductible.  When it comes to strata with more than one building, the deductible is a percentage of the value of the building(s) damaged, not the entire strata value.

The strata’s earthquake deductible is very high, is there any coverage available for a strata assessment?

Unit owners may obtain coverage under their personal insurance policy for earthquake loss assessment, to a specified amount.  The strata may also purchase earthquake deductible buy-down insurance if available.

As a current/former member of the strata council, am I protected under the strata's insurance?

The CapriCMW Strata Insurance Program includes Directors and Officers Liability covering past and current strata council members for actual or alleged acts, errors, and/or omissions during the course of their duties, as defined by the policy wordings.

Why does the strata’s insurance extend to protect the property manager?

The strata corporation must indemnify the property manager as per the industry standard agency agreement and therefore, the strata insurance is extended to protect the strata for their contractual requirements.

Does my strata need to obtain an appraisal annually?

The Strata Property Act requires the strata to review their values annually and the only accurate method to do so is via a replacement cost appraisal from a professional appraisal firm. Strata appraisers provide a three-year service - an appraisal report is issued in the first year, and two subsequent annual updates are issued without charge for the following two years.

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