SEARCH
save money, utility costs

The condo insurance market is undergoing dramatic changes.


Approximately 48% of insurance claims in the high-rise market are due to water damage, compared to 18% of claims due to fire and 4% due to theft. COVID is changing how our buildings are being used. Weather-related claims are increasing. Underwriters are changing their approach. As a response to all of these changes, rates are increasing. 

 

As the vast majority of insurance claims shift to floods, we are seeing the condo insurance market shift in response. Read more to learn about what some of these changes are.

Why is this shift occurring?

According to Canadian Underwriter, experts are blaming deteriorating infrastructure as a major factor in the increased insurance claims, pointing at aging and deteriorating pipes as a problem as water damage claims have almost tripled since 2013.

On top of increased claims, repairing the water damage is becoming more complex, driving up claims costs. Repairs need to be done with the correct new products, and tasks such as protecting against mold are more labour-intensive than they used to be due to the amount of infrastructure that needs to be replaced during the process.

How has COVID affected flood insurance claims?


With the pandemic keeping many businesses stay-at-home for well over a year now, high-rise buildings need to consider the effects of having large buildings empty in the long term. Pipes require winterization to prevent floods, and monitoring in case floods do occur. Water ingress – when outside water gets into a building – needs to be prevented, and the HVAC systems need to continue operating.

How are insurance companies changing?


Technological innovation is affecting how insurance underwriters work. Underwriters are on a path to becoming technological trailblazers, utilizing automation and leveraging technological tools to focus on higher-level challenges. Technology isn’t squeezing out underwriters, but rather a future tool that will be used to increase efficiency.

How are condos and tenants affected?


All of the changes above are affecting condo insurance, and the effects are directly affecting the condo owners. From 2019 to 2020, Ontario condo owners’ insurance rose by 8%.
In Alberta and BC, the increases are even higher, at 20% and 18% respectively. 

Ontario’s increase is attributed to a condo development boom, which corresponds to more insurance claims. Furthermore, aging infrastructure is affecting rates as well, as construction flaws become more apparent and claims in one condo can affect neighboring condos. 

 

Lastly, severe weather events are occurring more frequently due to climate change, which can also affect condo insurance claims. Claims related to severe weather events reached $422 million nationwide in 2008, and $2 billion nationwide currently. 

 

Claims made by the condo can increase insurance premiums, and the condos may pass these increased costs onto tenants through maintenance fees.

 
The insurance market is changing rapidly, and one of the best ways to protect your building and lower your rates is to invest in a water risk mitigation system. Contact us today for a quote.
Sincerely,
The Connected Sensors Team
0

save money, utility costs

If you’re considering a water mitigation system for your building, one of the most pressing questions you’re asking is probably: will a water risk mitigation system affect my insurance cost?

The short answer is: yes. 

But there’s more than one way that a water mitigation system can affect your insurance cost.

Reduced Chances of a Claim

Currently, multi-residential high-rises have a 30% chance of making a claim each year, and 48% of those claims are due to water damage.

 

This greatly affects all stages of building and operating a multi-residential high-rise. 

  1. At the building stage, 10% of builders can’t get insurance.

  2. At the operational stage, insurance premiums are rising by up to 780% and deductibles are increasing to $500,000.

  3. The average claim cost due to water damage ranges between $150-$250k, affecting your premiums and resulting in facility down time. 

 

By setting up a water mitigation system for the purposes of early flood detection, you decrease your chances of needing to make a costly and time-consuming insurance claim.

Reduce the Chances of an Uninsured Incident

Unfortunately, not every water damage incident is covered by a condominium corporation’s insurance. Your insurance provider will be able to provide the details of your coverage for you. 

 

In some cases with condominiums, the owner may be responsible for the cost of the insurance deductible. The flow chart below summarizes the differences between insured and uninsured claims.


You can also read more here.

How Connected Sensors Can Help You


By preventing floods through monitoring systems, Connected Sensors can help you reduce the chances of costly deductible payouts.

 

Furthermore, we have partnered with NFP Insurance to offer long-term cost savings to insurance by potentially helping you save on front end premiums. 

 

We can also help you incorporate submetering to lower your water cost further by charging expenses back to tenants, or save on overall water cost by identifying leaks. 

 

In summary, a water risk mitigation system can affect your insurance cost, as well as overall cost, by:

-During the building phase by decreasing the chances of remaining uninsured

-During the operational phase by decreasing costly deductible payouts and potentially lowering your front-end premiums

-As part of day-to-day operations when used in conjunction with submetering

 
If you have any questions about how we can help you save on insurance costs, be sure to contact us.
 
Thank you,
 
Your Connected Sensors Team


 

0