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Strata Insurance – What is the Strata Corporation Required to Insure?
All strata corporations in BC, regardless of size, must obtain property and liability insurance, including bare land strata corporations and strata-titled duplexes.
Property Insurance
The strata corporation’s property insurance must be for:
- Common property
- Common assets
- Buildings shown on the strata plan, and
- Fixtures built or installed on a strata lot if built or installed by the owner developer as part of the original construction of the strata lot (e.g., the original flooring, cabinets, etc.)
Property insurance must be for the full replacement value(which requires a current appraisal) and insure against all major perils, which include:
- fire, lightning, smoke, windstorm, hail
- explosions
- water escapes
- strikes, riots or civil commotion
- impact by aircraft and vehicles
- vandalism and malicious acts
One surprising fact is that, under the Strata Property Regulation, earthquake insurance is not considered a major peril. However, purchasing a unit in a strata corporation that does not have earthquake insurance can pose significant risks.
Liability Insurance
The strata corporation must also obtain and maintain liability insurance to insure the strata corporation against liability for property damage and bodily injury, for a minimum amount of $2,000,000.
Strata Homeowner Insurance
It’s important to realize that strata corporation insurance is not the same as strata homeowner insurance. In order to mitigate their risks, many strata owners in BC obtain additional homeowner insurance, which often insures them for:
- Their household contents
- Upgrades made to the unit
- Strata deductible coverage (which protects them in case they are found responsible for paying the strata’s deductible(s).
It is always a good idea take a copy of the strata’s insurance policy to their insurance broker to have them help you with what insurance you need as a homeowner to compliment the Strata’s insurance.
