Condominium Corporation Insurance in Edmonton
The cost of condominium corporation insurance in Edmonton has risen sharply in the past few years. This is due to a few reasons:
- Insurance premiums for condominium corporations traditionally have been much lower than traditional home insurance, while representing a higher risk to insurers. Condominium corporation rates have now been brought in line with those traditional home insurance rates.
- Increasing number of claims across Alberta due to aging infrastructure.
- Condominium claims tend to be very large because of the high concentration of residences.
- Rising frequency of natural disasters such as wildfires and floods.
- Growing construction material and labour costs.
- Insurers withdrawing from the market.
Unfortunately, most of those factors are out of the control of condominium owners.
While the type of coverage required is governed by The Condominium Property Act, we go beyond that and provide even broader coverage for our condominium corporation clients.
There are a number of factors that impact condo corporation insurance rates in Edmonton, including:
- Age of the building.
- Construction materials used.
- The estimated cost to rebuild the structure.
- Number of floors and units.
- Type of heating/cooling systems.
- Type of plumbing.
- Type of electrical system.
- Roof type and age.
- Loss history.
- Claims history of the neighbourhood.
- Crime rate of the neighbourhood.
- Proximity to a fire hydrant and fire station.
- Proximity to risk factors such as being in a flood zone.
- If the building has risks such as a pool or wood-burning fireplaces.
- If the building is equipped with risk mitigation measures such as sump pumps, fire suppression systems, sewer backup valves and security systems.
Many condominium boards in Edmonton are looking to lower their insurance rates. This is currently very difficult given the hard market for condominium insurance across Alberta. However, there are some ways you can potentially lower your premiums:
- Work with us to get competitive quotes.
- Increase the deductible.
- Invest in mitigating risks through upgrades or mitigation measures.
No two policies are created equal but generally, your policy will be designed to cover all the common property of the corporation (and the units, while excluding owner improvements).
Every policy is different, however the general rule is that if it is not covered, it is because it is an uninsurable peril, such as:
- Seepage and leakage of water.
- Damage by pests such as rodents and insects.
- Cracking or settling of the foundation.
- Wear and tear.
It’s important to review these areas with your broker so as to be able to communicate to the condominium owners what is not covered by insurance.
Insurance for condominium corporations covers:
- The common property.
- The condominium units, excluding improvements.
Condominium unit owner’s insurance covers:
- Personal property.
- Unit improvements.
- The deductible under the insurance for the condominium corporation should the claim originate within the unit (an owner is responsible for up to $50,000 and does not need to be found negligent in causing the claim).
Yes, we recommend condominium unit owners and tenants carry their own insurance. This can be done through making it a condition in the bylaws of the condominium corporation.
The Condominium Property Act, as well as most by-laws, dictate that the condominium corporation must carry directors’ and officers’ coverage in case an error is made by a board member in the responsibilities of managing your condominium corporation.
This coverage is in place to not only protect the condominium corporation against lawsuits, but also the individual board members if named personally in the lawsuit. This even extends to past board members in case the error was made by a previous board member who is no longer serving on the board.
Insurance for condominium corporations is classified as high risk due to the high ratio of residences in a given area. By placing high deductibles, that portion below the deductible is passed to the owner(s), which is then covered by that owner’s personal insurer. This is referred to as “spreading the risk” where small claims are passed to the insurers of the owners, while the insurers for the condominium corporation then handles the large losses, such as fires, hail, wind and floods.
This is a tool in not only reducing insurance rates, but also in being proactive in making sure nuisance type claims are not causing problems for the insurance held by the condominium corporation.