Now is not the best time to own a condo. Due to the rising number of natural disasters and reconstruction costs, some insurers are backing out of the condominium market. As such, insurance premiums for condo buildings are rapidly spiralling upward in Canada. Unfortunately, this isn’t the only component that’s challenging the wallets of condo owners. Condo resale value is also being hurt by deductibles Alberta has put in place for residents there.
We explain the implications and details of both below.
Dealing With Deductibles Threatening Condo Resale Value
As globalnews.ca states regarding condo deductibles for Alberta, “Effective Jan. 1, 2020, condominium corporations will be able to seek recovery of the deductible portion of the corporation’s insurance claim – up to a maximum of $50,000 – from a condo owner for any damage that originates in their suite or private area.”
This is a potential cause of worry for condo owners in Alberta because it means if there is any damage that occurs they are not at fault for they could pay up to $50,000 before insurance could potentially help. These include damages like water dripping through the roof from leaking pipes, or a toilet overflowing. To even pay some of this deductible mean may just getting insurance to cover the deductible itself for some homeowners.
Rising Insurance Premiums
Unfortunately, the challenges condo owners are facing don’t stop there. Condo buildings in British Columbia are particularly facing insurance premium increases up to 300% as Condominium Homeowners Association executive director Tony Gioventu recently stated.
This is primarily due to the damage fire and flooding and other natural disasters B.C. and other provinces have been experiencing. There have been many insurance payouts jumping as high as $2 billion in recent years.
As such, some insurers are backing out enabling the rest to raise their premiums to compensate. While this isn’t the case across the board, rising insurance costs do hamper property value. Generally, the higher the monthly fees for a condo, the lower the condo value.
Ensure you’re financially prepared by evaluating your home and situation you’re currently in.