REAL-TIME RESULTS MAP
Loading articles...

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

Last Updated Dec 1, 2020 at 10:31 pm PDT

FILE - A crane is seen at a condo development under construction as condo and office towers fill the downtown skyline in Vancouver, B.C., on Friday March 30, 2018. (THE CANADIAN PRESS/Darryl Dyck)
Summary

A bit of relief in the New Year for strata owners in B.C. struggling with sky-high building insurance rates

Insurance companies are agreeing to end one practise that's contributed to sky-high rates

Starting January best terms pricing will be gone that left stratas paying the highest premium even if low ones were bid

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.

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.”

RELATED: 

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.