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Rising insurance costs worry condo owners

Last Updated Dec 13, 2019 at 11:47 am MST

A shot of a condo complex overseeing the Calgary Tower in downtown. (CREDIT: @CREBNow, 660 NEWS)

CALGARY (660 NEWS) – Condo insurance rates are on a steady rise, prompting concern for those who have to foot the bill.

In the coming years, residents could see a 20 to 25 per cent increase on low or no risk condos, with high-risk buildings paying a much higher percentage.

“With a hard market, there’s less insurers getting involved in insuring real estate,” said Curtis Siracky, Chair of the Associations of Condominium Managers of Alberta.

Siracky said natural disasters and high demand for coverage are contributing to the jump in rates.

The Insurance Bureau of Canada currently has no cap on condo premiums and the government doesn’t require insurers to apply for a rate increase.

With the rising rates, Siracky worries this could lead to a decline in condo ownership.

“It’s supply and demand, you’re going to see higher premium rates (and) you’re going to see shrinking coverage capacity.”

According to the Calgary Real Estate Board (CREB), sales of condo/apartment units dropped 21 per cent from Nov. 2018 to Nov. 2019 and has been below the 10 year average for sales since 2015.

The jump in premiums has led to smaller groups bidding on insurance with a lead insurer and other companies below it, but Siracky said those are disappearing.

“The bigger ones are left holding the whole bag. Essentially that’s going to increase across the board.”

He added a cap on premiums would make living in a condo more affordable and avoid putting pressure on residents to pay more.

He said if you’re looking to purchase condo insurance, it’s best to shop around and consider bundling with your auto policy.