Landlords are shrinking as insurance premiums rise

A combination of factors are putting financial pressures on property owners in British Columbia who are seeing skyrocketing property insurance premiums while their ability to increase rents is currently being frozen and tied to just 1.4 percent in 2021, under regional rent control legislation.

Will Eddy, an executive client at Excel Insurance Brokers (Metro Vancouver) Inc. “The insurers are putting their weight in,” explains that the owners of old multi-family buildings in Vancouver are particularly vulnerable. “We’re seeing increases of 40, 50, 100 percent.”

Eddy said mounting claims on the most expensive real estate for rent in the country are causing a number of insurers to withdraw from the British Columbia market.

The Vancouver rental world is dominated by low-rise timber-framed residential buildings that were built more than 50 years ago. However, given the value of land, the highest rents in the country, and tight vacancy rates in the 1 percent range, these old buildings can sell anywhere from $ 300,000 to over $ 500,000 per suite.

In one deal in July, two adjacent rental buildings were sold in Kitsilano for $ 335,000 per suite, largely due to the value of the land.

Eddy said that old property owners who cannot prove to keep up with the maintenance and modernization work, especially in electrical, plumbing, heating and roofing systems, are being shocked by the new insurance rates.

He added that earthquake insurance rates, which are mandatory for most financing, are “being exceeded.”

“Some insurers have pulled out of BC altogether,” Eddy said.

A Vancouver property owner, who asked not to be named, told Western Investor, “I see a 50 to 95 percent increase in insurance policies that have been renewed in the past 12 months. On top of that, while annual premiums are jumping a lot, so is Deductions, such as flood damage. Some companies no longer offer earthquake coverage. “

Mark Goodman, a multi-family specialist at Goodman Commercial Inc. , In Vancouver, an insurance breakdown of an older Vancouver apartment building that was re-insured in mid-September:

• All deductible risks increased from $ 5,000 to $ 15,000.

• Increased deductions for backup sanitation and water damage from $ 10,000 to $ 50,000;

• The earthquake deduction increased from 10% to a minimum of 20%, at $ 100,000;

Increasing the amount deducted from floods from $ 25,000 to $ 50,000.

• Lock and key trim increased from $ 250 to $ 2,500; And

Carve-out pollution liability increased from $ 10,000 to $ 25,000.

Insurance coverage may not, however, be sufficient to replace a building in Vancouver in the event of a disaster.

Insurers rely on industry reviews, from companies like Altus Group or Butterfield Development Consultants Ltd. , For replacement costs, which are currently between $ 238 and $ 280 per square foot for a logframe apartment building in Vancouver.

Eddy admitted that with Vancouver civic fees, modern green building standards, lengthy approval delays, and increasing labor and material costs, this is often not a realistic number for building replacements.

Even landlords who have been strict with capital upgrades face much higher insurance rates, according to David Hotneyac, president of LandlordBC.

“What we see is that, even with robust risk management practices, the insurance premiums for purpose-built rental buildings are increasing dramatically this year. [We have] “Concern about what the future holds as insurance markets tighten,” Hotniak wrote in an emailed statement.

Hutniak said that the rise in insurance industry rates parallels what is happening in the BC layers market.

Corey Petersen, President of Stratawest Management Ltd. And former president of Strata Property Agents of BC, Strata companies have seen premium increases of 40 to 100 per cent this year, with little warning.

On September 14, the British Columbia government responded with tepid regulatory changes that would give classes a warning about insurance increases, but are not expected to cut costs.

LandlordBC called for regional intervention to secure purpose-built rental buildings in a submission to the Treasury this summer, but has not received a response.

As property owners in Metro Vancouver see the highest rise in insurance, prices are rising across the province, notes James Blair, an agent at Marcus & Millichap who handles listings across British Columbia.

“The last example was one of the buildings we just sold in Prince George. And Blair said the premium had gone from about $ 12,000 a year to more than $ 30,000.”

Hutniak noted that British Columbia landlords are squeezed between costs and income. Rent increases have been frozen since March, and the Residential Tenancy Law has cut the allowable rent increase for 2021 to 1.4 percent, down from 2.6 percent this year.

“With the increase in insurance costs, property taxes, utility costs, COVID-19 related expenses, and the continuous increase in all other operating and maintenance expenses, many rental housing service providers will face some real challenges in the balance this year and into 2021,” Hutniak declared.

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos