Strata Owners and Insurance Deductibles
There were a number of news stories published over the past week regarding a very common practice of Strata Corporations. The gist goes something like this: most buildings have bylaws which permit the Strata Council to charge back the cost of insurance deductibles (and in practice, amounts below the insurance deductible) to the owner of a suite where damage originates. The most common example of this is when water flows from one suite to others. Some feel that this practice is unfair, but it is very common.
We’ve long advised our clients in meeting minutes and at general meetings of the importance of maintaining adequate home insurance, not just to cover betterments/improvements, belongings and themselves, but also to make sure that in the event the owner is assessed a deductible for a loss that they will have coverage and their insurers will be ‘on the hook’, not the owner. As noted in most of the articles, the damage does not necessarily need to be an owner’s fault, just their “responsibility” which has a much looser definition.
We recommend every strata owner review their homeowner insurance coverage and, if necessary, instruct that it be amended so that they have adequate coverage for the deductibles assessed by the strata corporation. This is becoming even more important as deductibles increase throughout the Lower Mainland.