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Condo Regulation

Condo regulation rules have changed as of January 1 2020. Over the past 10 years, we have seen a steady increase to deductibles in condo insurance policies and deductibles can range anywhere from $5000 up to $250,000 for larger properties. The insurance market for condos has been one of the most unstable markets in the province due to environmental loss, huge property limits and owner occupied claims. As of January 1, 2020 an amendment to the Condo Act in Alberta requires Condo Corporations to insure a condo building for the full appraised replacement value, which in turn drives up the deductible in order to mediate the overall premium cost of the policy. Applying a higher deductible helps to manage insurance premium costs (which have tripled now that Condo Corporations are required to insure to full replacement value).

The important part to note about this regulatory change is that, if you own a condo unit and your unit causes a claim, Condo Corporations can now more easily pass along deductible expenses – up to a $50,000 maximum. This essentially helps share the burden of insurance costs with the unit owners insurance policy. Many standard condo insurance policies only include $25,000 for deductible expenses, so it is crucial to review your condo policy and coverage.

As your insurance broker, we have already been addressing this industry change and are reviewing and adjusting each of our condo policies to hold increased coverage of $50,000 for deductible expenses. The cost to the policy holder is minimal – in some cases only $50 to better protect you as the individual condo owner in the case of a claim. If you have any questions on this change, please don’t hesitate to connect with us, whether you are an existing client or not. We are always happy to answer questions.

You can review the condominium rules on the Alberta Governments website.

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