Protect Yourself: Strata Water Deductible Review Reminder

Many Strata Annual General Meetings are coming up over the next few months presenting an ideal opportunity for strata lot owners to verify that their home owner insurance policy water deductible coverage matches that of the strata corporation's master building policy and if not advise their insurance broker immediately.

The BC Strata Property Act requires that any AGM Notice includes a copy of the strata corporation's insurance policy summary. This summary page will include a notation on what the building’s current water deductible amount is. Depending on any resultant water damage claims filed in the past policy year and the extent of damage, this deductible amount can increase to a staggering amount from the previous year. It is not uncommon for strata's today to have a deductible in the $50,000 to $100,000 range from the days of when they were $5,000 to $25,000.

WHY IS THIS IMPORTANT TO YOU AS A STRATA OWNER? Deductible assessment coverage is an additional coverage that has become increasingly important in light of the increasing cost and frequency of resultant water damage claims. For example, if the building is damaged due to a water leak, the strata corporation would generally file a water damage claim with its own insurance company. A strata corporation may then sue a strata lot owner to recover the insurance deductible even though the owner was not negligent and merely caused or brought about the events that resulted in the damage. To remove ambiguity and potentially save on future legal expenses, some strata corporations have passed bylaws that clarify that owners are strictly liable for damage to common property that originates in their units.

With the rainy season upon us, this is the perfect time to check into this issue.