Condominium Insurance: Market Crisis or Market Correction?
FEATURE
CONDOMINIUM INSURANCE:
Market Crisis or Market Correction? Tom Gallinger, BBA, FCIP Vice President Atrens-Counsel Insurance Brokers part of Arthur J. Gallagher (Canada) Limited
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f you live in a condo, sit on your condominium board, or are employed as a professional condominium property manager in the Province of Ontario, then you have likely heard the noise over the past twelve months regarding condominium insurance, especially as it relates to increased premiums and increased deductibles. There is no doubt that condominium corporation insurance has been impacted in the area of pricing and deductibles right across the country. Depending on which province you live in, the impact can fluctuate significantly. While there are some commonalities, the differing condominium legislation, construction practices, weather patterns, and catastrophe exposures can pose vastly different challenges for condominium consumers across the country when purchasing their mandatory insurance coverage. For the purposes of this article, my comments are contained to the Ontario marketplace where I practice as a condominium insurance broker. The impact to the corporation’s insurance program at the time of renewal can vary considerably depending on construction details, location, historical pricing level, claims history, and other risk factors underwritten by the major insurance companies. The obvious question heard from condominium boards upon receiving their renewal is “Why is this happening?” The simplified answer is that the general insurance marketplace is entering a “hard market” cycle. This kind of market cycle has happened in the past and usually occurs following a prolonged period of intense competition among insurers. When insurance company pricing is too low for too long
G O L D E N H O R SESHOE CHAPTER OF THE CANADIA N CO N D O MI N I U M I NSTI TUTE
