Rising insurance costs are a major concern for many of the approximately one-quarter of British Columbia’s residents who live in strata properties. This issue was a significant advocacy point for BCREA during the recent provincial election campaign, and it will continue to be a key issue as we work with the new government.
The recent announcement from the BC Financial Services Authority (BCFSA) that will put an end to “best terms pricing” is an important step in addressing this issue. In many cases, an insurance broker seeks coverage for a particular building from many different insurers, each of which agree to accept a certain percentage of the insured value, at a specific rate. Under best terms pricing, the highest bid of all participating insurers applies to the entire policy. “Best terms” applies to the insurers, not to the insured. The BCFSA and the insurance industry have agreed to end this practice effective January 1, 2021.
BCREA applauds this announcement, while recognizing that the complexity of the strata insurance market means more must be done, particularly in the areas of strata council education, accountability and transparency of insurance renewals, and greater participation of insurers in the provincial market.
This announcement from the BCFSA does not discuss the new pricing model, only that best term pricing will cease. More clarity is needed as soon as possible to provide certainty for stratas moving forward.
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