What You Need To Know About Strata Insurance
Understanding what the strata insurance covers and what your obligation as an owner in a strata is an important topic. The insurance coverage for the strata development must be included in the strata documents. Then as an owner, you take this document to an insurance brokerage and get your owner’s insurance. It is essential to get all the coverage you need so that between the strata corporation and yourself you are fully covered. The content of this post has been provided by Acera Insurance Services Ltd.
Frequently Asked Questions
Q. The Strata Corporation carries insurance, why do I also need a Unit Owners/Tenants Policy?
A. An owner and tenant are responsible for obtaining insurance coverage to cover risks that are not covered by the Strata Corporation’s insurance policy.
Q. What does the Strata Corporation insurance include?
A. The Strata Corporation insurance intends to cover the building as originally constructed by the developer.
Q. What is not covered by the Strata Corporation, which I should be insuring under a Unit Owners/Tenants Policy?
A. Your contents, any improvement or betterment since the original handover from the developer, additional living expenses to cover your relocation costs after a claim, your liability for lawsuits, and deductible/loss assessment.
Q. How do I know whether my policy is for Full Replacement Cost Coverage?
A. Full Replacement Cost is included unless otherwise noted. If the Property of Every Description and Equipment Breakdown has the same limits noted, then Full Replacement Cost is in effect. Confirm this with your insurance broker.
Q. Why are deductibles increasing?
A. Increasing costs and frequency of claims have led to poor results for insurers in the strata class of business. In response to ongoing financial losses and an analysis of a strata’s claims history, insurers are increasing deductibles to new minimum requirements.
Q. What is the definition of Sprinkler Discharge?
A. Sprinkler Discharge means activation, discharge/leakage of a sprinkler head, a component of the fire suppression system unless directly resulting from fire, smoke, heat, or explosion. Sprinkler discharge is a type of water damage for which insurers sometimes require a higher deductible applied due to losses from this peril. If there is not a specific deductible noted for sprinkler discharge, insured losses would fall under the All Other Losses or Water Damage Deductible depending on the proximate cause of loss.
Q. What is the definition of a Vacant Unit?
A. A unit that is uninhabited at the time of loss, regardless of the presence of furnishings, due to all previous occupants having terminated their residence without intention of lawfully returning and no new occupants having taken up lawful residence.
Q. What is the definition of Illegal Drugs?
A. Illegal Drug Activity means any activity relating to either the growing, cultivation, harvesting, manufacturing, distribution, or sale of any non-prescription controlled substance or substances enumerated in Schedule (Section 2) of the federal Controlled Drugs and Substances Act Narcotic Control Regulations C.R.C., c 1041 (an amended from time to time), whether or not the Named Insured is aware of such activity. Often, Illegal Drug Activity is excluded entirely from insurance, but coverage is afforded under our policy.
Q. What is the definition of Flood?
A. Flood means tsunami, waves, tides, tidal waves, or the rising of, the breaking out, or the overflow of any body of water whether natural or manmade. For strata insurance, owners cannot cause a flood (i.e. this is not a potential strata owner deductible assessment). The Flood deductible would be funded by all owners based upon unit entitlement if assessment was required.
Q. What is the definition of Wildfires of Note?
A. Wildfires of Note means “wildfires which are highly visible or which pose a potential threat to public safety”. The Wildfire deductible would be funded by all owners based upon unit entitlement if assessment was required.
Q. What is my portion of the Earthquake deductible?
A. The earthquake deductible is applied as a percentage of the value of the buildings(s) damaged. The earthquake deductible minimum only applies if the percentage deductible is lower than the minimum stated, which is very rare. For example, a $10,000,000. building with a 20% deductible, a minimum of $250,000, would have a deductible of $2,000,000. (20% of $10,000,000. with a minimum of $250,000. irrelevant). Any special assessment to fund the strata earthquake deductible would be based on unit entitlement. To calculate the average earthquake deductible assessment for each owner, divide the strata earthquake deductible by the number of units. Using the above example, if there were 100 units, the average assessment to each owner would be $20,000. ($2,000,000. / 100).
Q. What is Deductible Assessment/Loss Assessment?
A. Most Strata Corporation bylaws allow the Strata Corporation to assess the deductible to the source unit owner. Therefore all owners must have personal insurance coverage to fund such an assessment in the event the strata loss results from their unit. Owners should carry coverage to the highest potential deductible assessment figure which is typically the water damage deductible or sprinkler discharge deductible, if higher.
Q. What about damage below the Strata Corporation deductible?
A. While the Strata Property Act requires the Strata Corporation to maintain insurance, the Act does not contain a duty to repair the strata lot. This means that if damage to the Strata Corporation property is below the deductible, all unit owners will typically be responsible for repairing their unit. Moreover, you can be responsible for repairing your unit even if the damage is caused by another unit or common property. You must have insurance to cover repairs to your unit below the strata deductible, and this coverage is often referred to as Unit Additional Protection under a personal insurance policy.
Q. How do I find Deductible Assessment/Loss Assessment Insurance?
A. Get in touch with your current personal insurance provider to get this necessary coverage, and share the Summary of Coverage document outlining the Strata Deductibles.
Q. My insurer cannot match the policy deductibles.
A. Each personal insurer has different stipulations and limitations. Ask your broker for advice on other potential options. Acera Insurance Services Ltd. is also proud to launch our new Deductible Assessment Buy-Up program for unit owners at deductible coverage.
Q. What else can I do?
A. Preventing claims is always best, and not limited to but include that you check and replace your supply lines, know where your water shut-off valves are located, consider water leak detectors, perform regular and preventative maintenance, never leave your appliances running while away from home, and consider installing sprinkler cages.
If you think I would be a good fit to work with you and your family, and you are not already working with a Whistler realtor, please contact me. I look forward to hearing from you.
It’s a Good Life in Whistler!
Marion
Marion Anderson Personal Real Estate Corporation
marion@WhistlerSkiinSkiout.com (604) 938-3885