B.C. insurers agree to end practice driving up strata insurance

VANCOUVER (NEWS 1130) — B.C. strata owners suffering under massive and mounting insurance rates will get a bit of a break in the New Year since an end is coming to a practice that contributed to the sky-high fees.

Insurance companies have agreed to end “best terms pricing” – which meant premiums were based on the highest bids for insurance – by the end of 2020. The practice resulted in stratas paying the highest premiums even if low ones were bid.

B.C. strata owners suffering under massive and mounting insurance rates will get a bit of a break in the New Year since an end is coming to a practice that contributed to the sky-high fees. https://t.co/pq7xUFAc7F pic.twitter.com/tfqrjYI6CV

— CityNews 1130 Vancouver (Inactive) (@news1130) December 2, 2020

The BC Financial Service Authority (BCFSA) conducted a review of the issues and looking for solutions.

Premiums were based on the highest bids for insurance.

“Overall premiums were roughly about 27 per cent higher than if another pricing method was used,” says Frank Chong, vice president and deputy superintendent of financial Institutions, While the removal of best terms pricing will help alleviate some of the pricing pressures, it will not be the core reasons for the increases.”

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He says strata building affected the most by best term pricing.

“We looked at a sample of months of properties that purchased strata insurance, and we found that 94 per cent impacted,” Chong says.

Asifa Lalji, who has been pressing for change since the rate on her strata building increase 300 per cent, says this is just a drop in the bucket.

Minister of Finance Selina Robinson says the end to best terms pricing is a positive step toward a health insurance market.

“This is a very complex issue with many factors contributing to rising premiums, and I look forward to receiving BCFSA’s final report and reviewing its findings so that we can continue to work towards viable solutions to this problem impacting many residents in British Columbia,” she said in a release.”

The BCFSA’s final report will be released this month.