The difference between home and strata insurance

Maybe tromping through all of those open houses was a waste of a Sunday afternoon, after all. Despite restrictions placed on physical distancing, Canadians are purchasing homes at an unprecedented rate. The truly lucky—or people gambling that “work from home” will become a permanent fixture in the employment landscape—have bid up the prices of single family homes in virtually every neighbourhood in western Canada.

Others who believe that urban renewal and summer condo parties are just a vaccine shot away will probably be looking at condominiums; some of which have risen in price while others have stayed quite affordable, especially in older buildings near a city core. Some of these buildings can look quite cookie-cutter, especially if a neighbourhood was planned, developed and built in the 1980s (Burnaby’s Metrotown is a good example of this kind of uniformity in planning).

Condos, in fact, are merely air-space. The land, building, utilities, laundry, fitness and guest rooms are co-owned by everyone. This might include owner/ investors who are renting out their units to tenants (or are even doing short-term rentals on Airbnb), seniors on fixed-incomes who have downsized into smaller dwellings to cut down on maintenance, or newly-married double-income, no kids couples who are just getting their foot into the housing market.

All strata corporations—which each owner “buys into” when they buy a condo—must carry insurance to cover the kinds of damages that can happen to the building envelope such as the roof, common areas,  This strata insurance is split up as part of the monthly maintenance fee and in theory, the strata must carry enough insurance to deal with any unforeseeable circumstance. The problem is that no two stratas are alike. As a prospective owner, you can gain access to strata council minutes in order to find out if your building is in good repair (to say nothing of its financial condition) — and this is a critical piece of homework in the home buying process. When in doubt, hire a lawyer or see an appraiser.

Like home insurance, strata rates are susceptible to the claims that are paid out in the past and, as B.C. strata corporations have discovered. Described (not entirely euphemistically) as a ‘perfect storm’, many of B.C.’s condos and townhomes are wearing out to the point that repairs are stratospherically expensive. Due to a huge shortfall of skilled labourers and increases in building costs, higher than expected repairs are driving the cost of insurance higher than the rate of inflation. These insurance hikes are, of course, borne by the owners of the strata. In fact, strata corporations can even experience outright cancellations of their insurance policies, leaving everyone in a tower or complex vulnerable until new coverage is obtained. New regulations in B.C. should alleviate buyers getting stuck with onerous insurance bills due to extraordinary repairs, but it’s worth noting at time of publication.

Comparatively speaking, the homeowner’s policy that you take out to ensure your personal belongings is a different beast. It’s in your best interest to purchase a separate policy and if you have a roommate, ensure that they have a policy to cover any theft or damage, too. Keep in mind that you might need separate riders for bikes and specialized sporting gear, especially if those items are stored in common areas. Your contents will be covered in the event of You can get an instant quote right on our Insurely website, or you can talk to one of our Google Five-Star rated Guides if you need further assistance.

Our Insurely Guide’s are always around to answer your questions and we try to make it light and easy for you to understand. Schedule a call with us so we can answer all your questions.