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BC strata insurance crisis

A strata’s insurance deductible is shared by every owner, and an owner who caused the loss can be billed for all of it. The Province says deductibles can now run from $100,000 to $750,000 and higher. Read a building’s insurance in the strata documents before you remove subjects.

How a deductible reaches you

The deductible is a common expense, paid through strata fees by each lot’s share. The strata can take it from the contingency reserve fund or raise a special levy, with no 3/4 vote. A $250,000 deductible across 80 equal units is $3,125 each.

The Act also lets the strata sue an owner who is responsible for the loss or damage, to recover the deductible. The Province says the owner need not be negligent. Neither the Act nor the Regulation sets a maximum. A leak that starts in your unit can cost you the whole deductible, which is why owners insure against it.

A $250,000 deductible in an 80-unit building: who pays
A $250,000 deductible, 80 equal unitsWhat the strata doesWhat you pay
The loss is nobody’s faultShares the deductible through fees, the reserve fund or a special levy$3,125, your share
The loss started in your unit and you are responsibleMay sue you to recover the deductible, with no maximum in the Act or RegulationUp to $250,000, unless your own policy covers it

Earthquake cover works differently. Its deductible is a percentage of replacement value, typically 10% to 20% according to the Province.

Two disclosure rules added in 2020 and 2023

Strata insurance rule changes and their dates
DateChangeSection
Aug 14, 2020A strata must tell owners and tenants as soon as feasible of any material change in its insurance, including a higher deductible (Bill 14).s. 154(c)
Apr 1, 2023The Form B must carry a summary of the strata’s insurance coverage.Strata Property Act, s. 59(3)(l.2)

Premium and deductible figures from 2019 to 2022 were industry reports and are history. The Province’s current statement is the range above.

Documents to read before subject removal

  1. Request the Form B. The strata must provide it within one week of a request. The fee is capped at $35 plus copying. Read the insurance summary, the reserve balance and any special levy.
  2. Read the insurance certificate. Find the insurer, the coverage, the deductible for each peril and the renewal date. Compare the water-damage deductible with the contingency reserve balance.
  3. Pull two years of council minutes. Look for renewal trouble, deductible increases, water-damage claims, envelope repairs and planned special levies.
  4. Read the depreciation report. It lists the major components and the cost to replace them. Divide a large upcoming cost, less the reserve, by the number of units.
  5. Check the rental bylaws if you are buying to rent. Rental-restriction bylaws have been invalid since November 24, 2022. Short-term rental bylaws are still allowed. Confirm with your lawyer.
  6. Get your lender’s word in writing. Ask which strata documents it wants. Do not remove the financing subject until it confirms the strata review is clear.
  7. Quote your own unit policy. Ask a broker for loss-assessment cover sized against the strata’s actual deductible.

Your agent and lawyer should review all of these. If anything material flags, do not remove subjects until you have a written answer from the strata council. The wider list is in the buyer due-diligence checklist.

If you own in a strata

  • Ask a broker whether your unit policy includes loss assessment sized to the building’s deductible. The Province says an owner’s policy can cover the strata’s deductible.
  • Keep the strata’s insurance notices. Since August 14, 2020 it must tell you of any material change, including a higher deductible.
  • A buyer will request the Form B from your strata, with the insurance summary in it. Know what it says before you list.

Frequently asked questions

  • What is the BC strata insurance crisis?
    A period of steep premium and deductible increases for BC stratas, reported from 2019 to 2022. The Province changed the insurance rules in Bill 14, in force August 14, 2020. It requires a strata to tell owners and tenants as soon as feasible of any material change in its insurance, including a higher deductible. Since April 1, 2023 the Form B must carry a summary of the strata’s insurance. The Province now says deductibles can run from $100,000 to $750,000 and higher, depending on the number of units and the claims history. Source: Strata Property Act, s. 154; BC Government, Changes to strata legislation and Insurance for strata corporations (bclaws.gov.bc.ca, gov.bc.ca).
  • What is a strata Form B and what does it disclose?
    The Form B is the Information Certificate. The strata must give it within one week of a request from an owner, a purchaser or someone they authorize. It discloses the monthly strata fees, any amount the owner owes, approved special levies, the contingency reserve balance, court proceedings, outstanding work orders, and a summary of the strata’s insurance coverage. The rules, the current budget and the latest depreciation report are attached. The fee is capped at $35 plus photocopying of up to 25 cents a page. Source: Strata Property Act, s. 59; Strata Property Regulation, s. 4.4 (bclaws.gov.bc.ca).
  • What is a strata insurance deductible and why does it matter to a buyer?
    The deductible is what the strata pays before the insurance does. It is a common expense shared through strata fees, and the strata can pay it from the contingency reserve fund or a special levy without the usual 3/4 vote. If a $250,000 deductible is shared across 80 equal units, each pays $3,125. Separately, the strata may sue an owner who is responsible for the loss. The Province says the owner need not be negligent, and the Act and Regulation set no maximum. Source: Strata Property Act, s. 158 (bclaws.gov.bc.ca).
  • What is a depreciation report and is it mandatory?
    A depreciation report lists a strata’s major building components, their expected life and the cost to repair or replace them. A strata must now obtain one at least every 5 years. A strata created before July 1, 2024 with no report since December 31, 2020 had to obtain one before July 1, 2026 in Metro Vancouver, the Fraser Valley and the Capital Regional District, and must before July 1, 2027 elsewhere. Stratas with fewer than 5 lots are exempt. Ask for the latest report; it shows the work coming due. Source: Strata Property Regulation, ss. 6.21 and 6.22 (bclaws.gov.bc.ca).
  • What is Bill 44 (2022) strata, and how is it different from the SSMUH Bill 44?
    Two different Bills, both numbered 44. The 2022 one amended the Strata Property Act from November 24, 2022. A strata may no longer restrict the rental of a strata lot, so rental-restriction bylaws are invalid. Bylaws limiting or banning short-term rentals are still allowed. An age-restriction bylaw is now valid only for an age of 55 or more, with exemptions. The 2023 Bill 44 is the small-scale multi-unit housing law for municipal zoning, covered in the SSMUH guide. Source: Strata Property Act, s. 141; BC Government, Changes to strata legislation (bclaws.gov.bc.ca, gov.bc.ca).
  • How should a buyer evaluate a strata building's insurance posture?
    Read five things before you remove subjects. The Form B, for its insurance summary and its reserve balance. The insurance certificate or policy summary. Council minutes for the past two years, for any claim or renewal trouble. The special levy history against the contingency reserve. The depreciation report. An owner, or a person the owner authorizes in writing, can ask the strata for these records, and the strata must reply within two weeks. Source: Strata Property Act, ss. 35, 36 and 59 (bclaws.gov.bc.ca).
  • What should I budget for unit-owner strata insurance on top of the strata's master policy?
    Ask a broker for a quote on your own unit and a loss-assessment limit that matches the building’s deductible. The Act lets an owner insure the unit’s fixtures and improvements, loss of rental value, and liability for property damage and bodily injury, and the Province says an owner’s policy can include cover for the strata’s deductible. A deductible shared across the building arrives as a levy, so size that cover against the actual figure on the Form B or the strata’s notices. Source: Strata Property Act, s. 161; BC Government, Insurance for strata corporations (bclaws.gov.bc.ca, gov.bc.ca).
  • Can a lender refuse to finance a strata unit because of insurance issues?
    Yes. A lender sets its own rules for the property it lends against, and it reads strata documents as part of that. No published list of strata red flags was found, so none is quoted here. Ask your lender in writing which strata documents it wants, and do not remove the financing subject until it confirms the strata review is complete. The Form B insurance summary is not binding on the strata when it comes from the insurer, so ask for the policy itself. Source: Strata Property Act, s. 59(5.1) (bclaws.gov.bc.ca).
Sources(7)

Also drawn from: BC Laws, BC Government.

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Last reviewed by Bronson Job PREC, REALTOR®. Licence CC BY 4.0. How we verify.

I’m Bronson Job, a REALTOR® (PREC) with Momentum Realty Inc., so I earn a commission when I help someone buy or sell. This is general information, not advice on your situation, and I take no payment from any third party named here. How I verify.