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• Thus, all the insurance companies get paid the highest rate, regardless of their own lower bid. And that drives up the cost of the policy.
The Condo Home Owners Association of B.C. issued its own report on escalating insurance rates in June, and it highlighted best terms pricing as well, saying the system resulted in a “substantial elevated cost.”
This week, the association’s executive director, Tony Gioventu, said a lack of transparency in the industry has buried details about how this process has made premiums rise. “The difficulty is trying to get real numbers.”
Gioventu, though, said the strata council of one condo building in the Tri-Cities was recently able to obtain the details of how best terms pricing inflated its bottom line.
The first 70 per cent of the strata’s insurance was covered by seven insurers, averaging a rate of 23 cents per $100 of coverage, Gioventu said. But rate for the final 30 per cent ended up coming in at 46 cents per $100, he said, which “basically doubled the cost of their policy.”
The premium for this year came to almost $500,000 — more than triple the previous year’s rate. In order to pay for the new insurance policy, strata fees shot up by 22 per cent, he said, which meant each unit owner was on the hook for hundreds of extra dollars a month.
“You rarely ever get to see that information,” Gioventu said. “The brokers don’t want to disclose their commissions and how the pricing works.”
He believes the brokers, whose job is to secure the policies for stratas, aren’t pushing back against the insurance companies because the higher the policy, the higher the commission they collect. “It’s totally a problem.”