Running a Small Strata | Insurance
Strata Insurance and Deductibles in BC
Strata insurance is the policy the strata corporation must buy on the buildings, the common property and the fixtures the developer installed, for full replacement value, plus at least $2,000,000 of liability cover. It is required at every size, a strata duplex included, and the premium is paid through strata fees. Your own policy covers what the strata policy leaves out: contents, improvements, your liability, and a deductible the strata charges back to you. This page explains both policies, water damage, who pays the deductible, and what to check in a 2 to 6 unit strata.
The short answer
- 01Every BC strata, a strata duplex included, must insure the common property, the common assets, the buildings shown on the strata plan, and fixtures the owner developer installed in the original build, for full replacement value (Strata Property Act s.149).
- 02The policy must cover the "major perils": fire, lightning, smoke, windstorm, hail, explosion, water escape, strikes, riots or civil commotion, impact by aircraft and vehicles, vandalism and malicious acts (Regulation s.9.1(2)).
- 03The strata must also carry liability insurance of at least $2,000,000 (s.150; Regulation s.9.2).
- 04The premium is a common expense paid through strata fees. The deductible on a strata claim is a common expense too, but the strata can sue the owner responsible for the loss to recover it (s.158).
- 05Your own policy is separate. The Province strongly advises owners to buy one for contents, improvements, personal liability, living costs after a loss, and a deductible charged back to them.
- 06The strata must review its insurance every year, report on it at each AGM, and tell owners and tenants as soon as feasible of any material change, including a higher deductible (s.154).
What the strata must insure
Section 149 of the Strata Property Act lists four things the strata must insure: common property, common assets, buildings shown on the strata plan, and fixtures the owner developer built or installed in a strata lot as part of the original construction. The cover must be for full replacement value and must insure against the major perils in the Regulation and any other perils the bylaws name. The words "except in prescribed circumstances" were added to the full replacement value rule in 2020, and no circumstances have been prescribed.
"Fixtures" means items attached to a building, including floor and wall coverings and electrical and plumbing fixtures. Fridges, stoves, dishwashers, microwaves, washers, dryers and other items that come out without damage to the building are excluded (Regulation s.9.1(1)). The table shows who insures each part of a strata building.
| What | Who insures it | Source |
|---|---|---|
| Common property and common assets | The strata | s.149(1)(a), (b) |
| Buildings shown on the strata plan | The strata, at full replacement value | s.149(1)(c), (4) |
| Fixtures the owner developer installed as part of the original build, such as floor and wall coverings and electrical and plumbing fixtures | The strata (except in a bare land strata) | s.149(1)(d), (3); Regulation s.9.1(1) |
| Appliances that come out without damage, such as a fridge, stove, dishwasher, washer or dryer | Excluded from "fixtures", so the owner | Regulation s.9.1(1); s.161 |
| Upgrades to the original fixtures, and fixtures an owner added later | The owner may insure them. The strata may choose to insure fixtures added later | s.161(1)(b), (c); s.152(b) |
| Contents and personal liability | The owner | s.161(1)(e); Province |
| Lost rent above any strata cover | The owner may insure it | s.161(1)(d) |
| Houses on the lots of a bare land strata | The owner, unless the houses are shown on the plan | s.149(3), s.161(2); Province |
| Liability of the strata for property damage and bodily injury | The strata, at least $2,000,000 | s.150; Regulation s.9.2 |
| Errors and omissions of council members | The strata may choose to insure it | s.151 |
The Province says earthquake and overland flood cover are optional. The Act sets no rule on how often the building must be appraised for its replacement value, and there is no section 149.1.
How strata insurance works through the year
The premium is a common expense in the operating budget, so every owner pays a share through strata fees, split by unit entitlement. The strata corporation, the owners, the tenants and the people who normally live in the lots are all named insureds on the policy, whatever the policy itself says (s.155).
The Act gives the strata three duties each year (s.154):
- review whether its insurance is adequate;
- report on the cover at each annual general meeting, which is item (j) in the Standard Bylaws' order of business;
- tell owners and tenants as soon as feasible of any material change, including a higher deductible.
After a loss, the insurer pays an insurance trustee named in the bylaws, or the strata in trust, and the money must go to repair or replace the damage without delay (s.156, s.157). The strata can decide not to rebuild only by a 3/4 vote at a meeting held within 60 days of receiving the money (s.159).
Insurance also shows up in sale documents. Every Information Certificate (Form B) must include a summary of the strata's insurance, a rule in force since April 1, 2023 (s.59(3)(l.2)). If that summary came from the insurer or the insurance agent, the strata is not bound by it (s.59(5.1)). The strata keeps each policy for 6 years after it ends (Regulation s.4.1). For a new building, the owner developer's policy must run until at least 4 weeks after the first annual general meeting (s.15).
Your own policy
The Act lets an owner insure, despite the Insurance Act or any other law (s.161):
- their lot and the original fixtures, against perils the strata policy leaves out and for amounts above the strata cover;
- fixtures in the lot that the developer did not install;
- improvements to the original fixtures;
- lost rent above any strata cover;
- liability for property damage and bodily injury, in the lot or on common property.
The Province strongly advises owners to buy that policy, because the strata policy does not pay for contents, personal liability, living elsewhere after a loss, improvements, or a strata deductible charged back to the owner. The Province says strata deductibles "can range from $100,000 to $750,000 or higher". In a bare land strata the owner may insure the buildings on their lot (s.161(2)), and the Province says the owner is responsible for that insurance.
Neither policy has to share the cost of a claim with the other unless both cover the same property (s.162).
Who pays the deductible
The deductible is the part of a claim the insurer does not pay. These are the steps from a loss to a bill in an owner's name.
A loss happens
For example, a supply hose bursts in one unit and water reaches the unit below and the common property. Water escape is one of the major perils the strata policy must cover (Regulation s.9.1(2)).
The strata claims on its policy
The insurer pays the strata, or an insurance trustee named in the bylaws, and the money must be used to repair the damage without delay (s.156, s.157).
The deductible is a common expense
The strata pays the deductible from strata fees, split by unit entitlement (s.158(1)). It can use a special levy or the contingency reserve fund for it with no owner vote (s.158(3)).
The strata may go after the owner responsible
Section 158(2) keeps the strata's power to sue the owner responsible for the loss to recover the deductible. The Province, summing up court cases, says an owner can be "deemed responsible" for a loss that started in their unit without being at fault; its example is a dishwasher hose that bursts.
Your own policy pays, or you do
Whether your policy pays a deductible charged back to you, and up to what amount, depends on your policy. Compare its limit with the deductibles in the strata's insurance summary.
A 2020 amendment, section 158(2.1), would cap how much of a deductible the strata can recover from an owner. It is not in force. The same applies to a 2020 change to the fixtures rule in section 149(1)(d). Check the Table of Legislative Changes for the Act before relying on either.
The Standard Bylaws have no bylaw on charging a deductible back to an owner, so look for one in your strata's own filed bylaws. Section 116 lets a strata register a lien on a lot for four kinds of unpaid money: strata fees, special levies, the cost of work under section 85, and the lot's share of a judgment. A deductible charged back to one owner is missing from that list. A disputed chargeback goes to the Civil Resolution Tribunal or the courts.
Water damage
Water escape is a major peril, so the strata policy must cover water damage to the property the strata insures: the buildings, common property and original fixtures (Regulation s.9.1(2)). Damage to your contents and your upgrades is paid by your own policy, if you have one.
Overland flooding, where water comes in from outside after heavy rain or a river flood, is optional cover. The Province lists sewer backup among the extras an owner can buy on their own policy. Because the deductible on a water claim can be charged back to the owner whose unit the water came from, the limit on your own policy for a strata deductible is the figure to check first.
Insurance in a 2 to 6 unit strata
The insurance sections of the Act have no size rule. A strata duplex needs the same property policy and the same $2,000,000 of liability cover as a tower, and the Province's insurance page names strata-titled duplexes. Two owners who each carry a house policy still need the strata policy.
In a strata with fewer than 4 lots or 4 owners, every owner is on council (Standard Bylaw 9), so every owner shares the yearly review duty. In a bare land strata, the strata insures common property such as a shared road or water system, and the houses on the lots are usually the owners' to insure. The Province warns that if the houses are drawn on the plan, the strata may not be bare land, and the strata should get legal advice.
A new building has one more date. The owner developer must keep the strata insurance in place until at least 4 weeks after the first annual general meeting (s.15). The first year after handover page lists the other first-year dates.
What strata insurance costs
We found no official average premium for BC or for any city. The premium for one building is in that strata's operating budget, and the current budget must be attached to every Form B (s.59(4)(b)). A buyer can ask the seller for a Form B, and an owner can ask the strata for the budget and the policy. The strata fees page shows how the premium is split among owners.
Best For
- ✓ Small stratas that put the insurance renewal date and the deductibles on the AGM agenda every year, as section 154 requires.
- ✓ Owners who read the strata's insurance summary and set their own policy to match the deductibles in it.
- ✓ Owner developers who make sure the strata policy runs at least 4 weeks past the first AGM (s.15).
Usually Fails When
- ✕ Two duplex owners each buy a house policy and never buy a strata policy. The Act requires one at every size (s.149).
- ✕ The strata raises a deductible at renewal and nobody tells the owners and tenants (s.154(c)).
- ✕ A bare land strata assumes the strata policy covers the houses, when the houses are usually not on the plan.
What To Verify Before Spending Money
- → The deductibles on the strata's current policy, for water and for each other peril.
- → Your own policy's limit for a strata deductible charged back to you.
- → Whether your strata's filed bylaws say anything about charging a deductible back to an owner. The Standard Bylaws say nothing on it.
- → Whether the houses are shown on the strata plan, if you are in a bare land strata.
Common questions
What is strata insurance? +
Strata insurance is the property and liability insurance the strata corporation must buy. It covers the common property, the common assets, the buildings shown on the strata plan and fixtures the owner developer installed, for full replacement value against major perils, plus at least $2,000,000 of liability cover (Strata Property Act s.149, s.150; Regulation s.9.2).
How does strata insurance work? +
The strata buys one policy for the building, and the premium is paid from strata fees as a common expense in the operating budget. Owners, tenants and occupants are named insureds on it (s.155). After a covered loss, the insurer pays the strata, which must use the money to repair the damage (s.156, s.157). The strata reviews the cover every year and reports on it at each AGM (s.154). Each owner buys a separate policy for what the strata policy leaves out.
What does strata insurance cover in BC? +
By law it must cover common property, common assets, buildings shown on the strata plan, and fixtures the owner developer installed in the original build, at full replacement value, against fire, lightning, smoke, windstorm, hail, explosion, water escape, strikes, riots or civil commotion, impact by aircraft and vehicles, vandalism and malicious acts (s.149; Regulation s.9.1). It must also include at least $2,000,000 of liability insurance. The Province says earthquake and overland flood cover are optional.
Do you need home insurance if you have strata? +
The law does not require it; the Act says an owner "may" insure (s.161). The Province strongly advises owners to buy their own policy, because the strata policy does not pay for your contents, your personal liability, living somewhere else after a loss, your improvements, or a strata deductible charged back to you. In a bare land strata, the owner insures their own house.
Who pays the strata insurance deductible? +
The strata pays it first, as a common expense shared through strata fees (s.158(1)). The strata can then sue the owner responsible for the loss to recover it (s.158(2)). The Province says an owner can be "deemed responsible" for a loss that started in their unit without being at fault. A 2020 amendment that would cap an owner's share of a deductible is not in force.
Is strata insurance mandatory? +
Yes. Every strata corporation must buy property insurance on the common property, common assets, buildings on the plan and original developer-installed fixtures, and liability insurance of at least $2,000,000 (s.149, s.150; Regulation s.9.2). The rule applies at every size. The Province's insurance page names strata-titled duplexes.
Does strata insurance cover water damage? +
Water escape, such as a burst pipe or hose, is one of the major perils the strata policy must cover, for the property the strata must insure (Regulation s.9.1(2)). The deductible applies, and the strata may recover it from the owner responsible (s.158). Overland flooding is optional cover. The Province lists sewer backup among the extras an owner can buy on their own policy.
How much is strata insurance? +
There is no official average for BC; we found no published government figure. Each strata's premium is in its own operating budget, and the current budget is attached to every Information Certificate (Form B) a buyer or owner receives (s.59(4)(b)). Ask the strata for the budget and the insurance summary to see the real number for one building.
Does strata cover building insurance? +
Yes, for the buildings shown on the strata plan. The strata must insure them for full replacement value (s.149(1)(c), (4)). In a bare land strata the houses are usually not shown on the plan, so the strata policy usually does not cover them, and each owner insures their own house (s.161(2)).
Do strata fees include insurance? +
Yes, for the strata corporation's own policy. Its premium is a common expense in the operating budget, paid through strata fees. Your own policy for contents and personal liability is separate, and you pay for it yourself.
How high are strata insurance deductibles in BC? +
Each policy sets its own. The Province says strata deductibles "can range from $100,000 to $750,000 or higher". Your strata's deductibles are in the insurance summary that must be on every Form B (s.59(3)(l.2)), and the strata must tell owners as soon as feasible when a deductible goes up (s.154(c)).
Does a strata duplex need strata insurance? +
Yes. Section 149 applies to every strata corporation, and the Province's insurance page names strata-titled duplexes. Two owners who each hold a house policy still need the strata policy on the building, plus $2,000,000 of liability cover, paid as a common expense.
Does strata insurance cover earthquakes? +
Not by requirement. Earthquake is not on the list of major perils in Regulation s.9.1(2), and the Province says earthquake cover is optional. A strata can add other perils by bylaw (s.149(4)(b)) or choose to buy more cover (s.152).
Can the strata decide not to rebuild after a loss? +
Only by a 3/4 vote at a general meeting held no later than 60 days after the insurance money arrives (s.159). The money is then held in trust and paid out by each person's interest, lenders included, unless the Supreme Court orders another plan (s.160).
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