Emergency Preparedness

March 21, 2025 Published by Huronia Chapter - By Jon Juffs

Ontario Condos Face More Risks

From the CCI Huronia Winter/Spring 2025 Condo Buzz Newsletter

Ontario Condos Confront Rising Risks from Record 2024 Weather Losses

The escalating costs of extreme weather events are a stark reminder of the impacts of climate change on our built environment, with condominiums being particularly vulnerable. The year 2024 marked an alarming milestone for weather-related losses in Canada, with insured damages soaring to $8.5 billion, surpassing the previous record of $6 billion set in 2016. For Ontario Condominium Corporations, the growing severity and frequency of extreme weather events pose unprecedented challenges, from rising insurance costs to increased maintenance demands.

“As we watch the devastating wildfires in California where insurability of homes is at real risk, Canada’s property insurers are raising the alarm that regions of Canada could potentially face similar challenges. While insurance covering wildfires remains widely available, the increased frequency and severity of weather related losses continues to create claims cost pressures that will impact the cost of insurance.”

Data published in early January 2025 by the Insurance Bureau of Canada (IBC) highlights the scale of these challenges. This surge underscores the growing threat of severe weather to Canadian properties, including condominiums in Ontario, which have unique vulnerabilities due to their density and shared infrastructure.

In Ontario alone, the GTA flooding in 2024 accounted for over $1.1 billion in damages, a clear sign of the region's growing vulnerability.

Noteworthy Events in 2024:

• Toronto and GTA Floods (July 15–16): $990 million in losses.
• GTA Flooding (August 13–September 16): $110 million in losses.
• Other Major Events: Jasper wildfires ($1.1 billion) and the Calgary hailstorm ($3 billion).

Key Impacts for Ontario Condominium Corporations:

GTA Flooding Highlights Infrastructure Vulnerabilities:

July and August 2024 saw significant flooding in the Greater Toronto Area, resulting in nearly $1.1 billion in insured losses. These events disrupted daily operations, strained budgets, and highlighted vulnerabilities in existing infrastructure and risk management practices. Many Condominiums in the region experienced property damage, operational disruptions, and increased insurance claims, both personal and corporate.

Soaring Repair Costs Drive Insurance Premiums Higher:

The IBC highlights a 485% increase in the costs of repairing and replacing personal property since 2019. Condominium Corporations will likely see rising premiums, making it critical to plan for these escalating expenses in operating budgets. Reserve funds are not immune either, as the costs of repairing or replacing damaged common elements earlier than planned may make good business sense. Investing in timely repairs reduces claims and helps stabilize premiums.

Proactive Measures Needed:

With severe weather events becoming more frequent and costly, IBC stresses the need for updated building codes, better land-use planning, and infrastructure investment. Ontario Condominiums should focus on enhancing resilience through practical measures, such as adopting severe-weather-resistant materials, fireresistant designs, and proactive floodproofing. These investments will not only reduce future damages but also contribute to more stable insurance rates.

Insurance Affordability Challenges:

As insurers price for increasing risks, the availability and affordability of insurance could decline. This makes it essential for Condominium Corporations to collaborate closely with brokers to secure coverage and plan for higher deductibles or potential gaps in coverage.

Preparing for the Future

Ontario Condominium Corporations must adapt to these evolving challenges by prioritizing:

• Reserve Fund Contributions and Balances: Establish policies to ensure reserve funds are adequately replenished and account for potential increases in repair costs. Set a reasonable multiple (perhaps 1x to 3x) of the Corporation’s deductible as the minimum fund balance.
• Building Maintenance and Upgrades: Investing in flood prevention measures, robust HVAC systems, and resilient building materials.
• Emergency Preparedness: Implement annual emergency response drills and maintain a network of local resources for disaster management.

Condominium Boards should actively advocate for collaboration among governments, insurers, and Property Managers to mitigate risks, improve resilience, and safeguard communities. Collaborative initiatives, such as pooling resources among Condominiums to tackle shared vulnerabilities like stormwater management systems, could also provide cost-effective solutions.

With record-breaking losses in 2024 underscoring the need for immediate action, Ontario Condominium Corporations must prioritize resilience and preparedness. Organizations like CCI-Huronia play a crucial role in equipping Condominiums with the knowledge and tools to navigate these challenges. By taking proactive steps today, Ontario Condominiums can safeguard their communities and ensure a resilient future. Together, we can build a more secure future for communities across the province. Condo Knowledge Lives Here.

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Jon Juffs
EGIS