Signs for Optimism in the Condo Insurance Market?

The condo insurance market in Canada appears to be stabilizing after facing challenges with premium and deductible increases in recent years. The market is expected to flatten or taper for most good risks and those with a better claims history. Condo/strata risks perceived as less favorable may still experience increases, especially for older buildings, those with poor maintenance, those located in flood zones, and buildings with inferior construction.

While rates may remain flat, premiums can still rise due to higher construction costs and replacement values of assets. The condo insurance market is part of the broader real estate market, which has also experienced general hardening in the insurance industry over the last few years.

Water damage claims, particularly in high-rise condo buildings, have been a significant factor contributing to higher rates and deductibles. However, experts believe that while rates and deductibles may not go back to previous levels, the drastic changes seen in the last few years are not likely to repeat in 2022.

Overall, the condo insurance market is expected to stabilize, but the future remains somewhat uncertain. However, the industry has learned from the challenges faced, and the extreme premium and deductible changes seen in recent years are not anticipated to occur in the coming year.