Like the rest of the country, Saskatchewan is seeing a surge in condo insurance rates.
Nationwide, insurance has gone up anywhere between 15 to 400 per cent, according to Galon Insurance.
In Saskatchewan, that range is slightly lower at 15 to 200 per cent.
Still, the spike translated into a $27,000 insurance increase for John McCormick’s Regina condo building in March.
“We’ve lived in the condo for 10 years and I’ve never seen this kind of jump before,” he said.
According to McCormick, the president of his condo association, the insurance increase means a condo fee increase of $30 per unit, per month. The insurance deductible also increased from $10,000 to $25,000.
“It’s just sort of out of the blue,” McCormick said.
“We asked a lot of questions as to why it was happening because we hadn’t had a lot of claims with our association.”
Jason Galon, general manager at Galon Insurance, says the spike is primarily caused by claims history including an increase in the magnitude of water damage in apartment-style condos.
“It could be a water heater rupture on a third or fourth floor. When that happens, it happens to leak down through the various floors below,” Galon said.
“It’s not only affecting one unit it affects multiple.”
In those cases, Galon estimates damages could cost between $25,000 and $200,000.
Condo insurance gradually started increasing over the last two years, he said, which is why the range of increases is so vast.
Galon calls the current state a “hard market” meaning rates are increasing, while insurance capacity is decreasing. He said it is “cyclical” but Saskatchewan hasn’t seen effects like this since the early 1990s.
“We should see some improvements to the rates,” Galon said.
“I don’t think we’re going to see them improve back to what we saw in 2010 to 2015.”
However, those improvements aren’t expected for the next three or four years, according to Galon.
There are ways to mitigate risk, he said, which in turn could lower insurance rates. Things like yearly condo unit inspections and water heater replacement programs.
But it’s not always practical for a condo association to enforce that, McCormick said.
“We don’t have the ability to tell the unit owners what to do in their units. I can’t force them to change their water heaters,” he said.