CONDO COVERAGE CRISIS

Buckstein explores how market pressures and climate issues are combining to reduce the availability of insurance to condo corporations in Canada. Despite their growing popularity as the housing unit of choice for millions of Canadians, condominium corporations across the country face serious headwinds in their efforts to secure sufficient insurance at a reasonable cost. Demand for condo insurance is increasing. Canadians appreciate the relative affordability and lower maintenance requirements of a condominium compared to a detached home. Government officials like condos for their efficiency in helping to address the affordable housing crisis and limit urban sprawl. Condo corporations include duplexes and four-plexes, thus making the total size and value of the industry difficult to track. The increase in demand and decrease in supply has resulted in serious difficulties for risk managers and brokers alike. Insurers select the risks they want to insure based in part on how much they anticipate paying out in claims costs. Due to an escalating number of condo claims, some insurers have withdrawn from the market. Others are willing to stay but only with radically different terms.