Is Your Strata properly insured? Many are not and don’t know it!

Could there be a chance your Strata isn't properly insured?

The answer surprisingly, may be that your Strata isn't properly insured and/or is paying too much for the coverage. Let's talk about both of these points.

Strata Councils should note Section 149  of the Strata Property Act requires that the strata corporation be fully insured and it is always advisable to provide the insurance brokerage placing the insurance with an updated ANNUAL appraisal of the strata corporation’s buildings and assets. This needs to be prepared by a professional appraisal company each year when renewing the insurance of the strata corporation.

The issue here with just renewing insurance is, the coverage is based on your last appraisal. If your appraisal is older than a year and there is need for partial or full replacement of anything, the insurance company will base the claim on the value represented in the appraisal. This could mean thousands of dollars disparity between the claim amount given by the insurance company and the actual replacement price. This situation often requires digging in to the CRF for the difference, or worse...going to the owners. And we all want to avoid that!

While we are talking insurance, it may be an idea to understand how your current management company goes about getting insurance quotes for your strata. How many do they get and how do they compare them before committing your strata's money in monthly insurance fees?

We cannot emphasize enough how important it is to Strata Corporations that they have a professional management company (like ours) provide them with guidance when obtaining quotes for insurance coverage. It is necessary to be comparing “apples with apples, not apples with oranges.” So, make sure to always obtain more than one quote to ensure you understand pricing, deductibles and coverage. That's what we do for our clients.

Related Article:

How to avoid Personal Liability as a Strata Council Member

More Strata Governance Pages & Articles:
 

• Strata Governance & How We Can Help
   
• The Truth About Strata Depreciation Reports
• Are There People in Your Strata Complex Getting a Free Ride?
• Myths Surrounding the Dreaded Strata Depreciation Report
• Strata Governance and Compliance. Do you know the difference?
• Your Strata could be NON COMPLIANT. How do you know for sure?
• Is Your Strata properly insured? Many are not and don't know it!
• How to avoid Personal Liability as a Strata Council Member
• One of the most neglected & misunderstood areas of the Strata Property Act
• Have strata councils expenditures been approved? How do you know?