What does strata insurance cover in BC, and what do I insure myself?

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The strata corporation insures the building, common property and original fixtures at full replacement value; you insure your contents, upgrades, liability, and the strata's deductible if a loss starts in your unit. In a strata, two policies share the risk: the strata corporation's, paid through strata fees, and each owner's own. Which one pays depends on what was damaged, where the loss started and the size of the strata's deductible. Look up the address or PID on PlaceDossier to see the record for that lot. What the strata must insure: Property insurance on the common property, the common assets, the buildings shown on the strata plan, and the fixtures the owner developer built or installed in each strata lot as part of the original construction, at full replacement value, against the major perils: fire, lightning, smoke, windstorm, hail, explosion, water escape, strikes, riots or civil commotion, impact by aircraft and vehicles, vandalism and malicious acts (Strata Property Act s. 149 (1), (4); Strata Property Regulation s. 9.1 (2)). Fixtures are items attached to the building, such as floor and wall coverings and electrical and plumbing fixtures, but not appliances that come out without damaging it (Regulation s. 9.1 (1)). It must also carry liability insurance of at least $2 million (s. 150; Regulation s. 9.2). What it may add: The strata corporation may insure council members against errors and omissions, other perils and liabilities, and fixtures owners added later (ss. 151, 152). Earthquake isn't one of the major perils, so earthquake cover is a choice; the Province strongly advises it in earthquake-prone areas, and its deductible is usually a share of the building's whole replacement value, not a set amount (the Province's strata corporation insurance page). Overland flood cover is optional too. The deductible: The strata corporation's deductible on a claim is a common expense, paid through strata fees by unit entitlement (s. 158 (1)), and a special levy or reserve fund spending to pay it needs no vote unless the owners decide not to repair (s. 158 (3)). But the strata may sue an owner who is responsible for the loss to recover the deductible (s. 158 (2)), and many stratas' own bylaws charge it back to that owner (our reading; the Standard Bylaws don't). Responsible needn't mean at fault: the Province's page notes courts have found an owner responsible when a dishwasher hose burst in their unit and water spread to common property and other units. What owners are told: Each year the strata must review whether its insurance is adequate, report on it at the annual general meeting, and tell owners and tenants as soon as feasible of a material change, including a higher deductible (s. 154). The Information Certificate a buyer gets carries a summary of the strata's insurance coverage (s. 59 (3) (l.2)); unlike the rest of the certificate, it doesn't bind the strata where it came from the insurer or its agent (s. 59 (5.1)). After a loss: The insurer pays the insurance trustee the bylaws name, or the strata in trust, and the money must go to repair or replace the damaged property without delay (ss. 156, 157), unless the owners vote by 3/4 at a meeting within 60 days not to (s. 159); then the money goes to those with an interest in it, and an owner or a mortgage holder may ask the court for a scheme (s. 160). Your own policy: The owners, tenants and occupants are named insureds on the strata's policy (s. 155), but it doesn't cover your contents, your liability, living elsewhere after a loss, or the deductible charged to you (the Province's strata owner insurance page). An owner may insure the unit and its original fixtures against perils the strata's policy doesn't cover and above its amounts, fixtures and improvements added since, lost rent, and liability on the lot or the common property (s. 161 (1)); in a bare land strata, the owner insures the house and buildings on the lot (s. 161 (2)). A condo policy can cover some or all of a strata deductible charged to you. What it means for a buyer: Read the insurance summary on the Information Certificate, then ask the strata manager for the certificate of insurance, which lists the deductibles by peril (water, earthquake and flood often differ), and read the last two years' minutes for claims, premium increases and the date of the last replacement cost appraisal. A strata with many water claims can face a higher deductible or premium at renewal, which falls on every owner (our reading). Give your broker the deductibles when you arrange your own policy, and have it in place by completion: a lender usually asks for proof of insurance (our reading).

What does strata insurance cover in BC, and what do I insure myself?

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