Insurance

July 14, 2025 Published by Huronia Chapter - By Tricia Baratta

Not My Hazard

From the CCI Huronia Spring/Summer 2025 Condo Buzz Newsletter

As a condominium director, understanding how the global insurance market impacts your corporation’s insurance is essential as it provides valuable data for risk assessment but at the same time can sometimes result in unfavourable outcomes for condominium corporations. For example, if a region is broadly categorized as high-risk due to climate change or regional instability, insurers may raise premiums based on generalized data. This can strain annual budgets and reduce financial flexibility for routine maintenance, even when local conditions suggest a lower risk profile.

Catastrophe (CAT) hazard assessments evaluate the potential risks and impacts of natural disasters—such as floods, hurricanes, and earthquakes on properties and regions. These assessments help insurers determine the likelihood and severity of such events which directly influenced premiums and coverage terms. However, these evaluations often overlook specific local factors that can significantly mitigate risk.

For example, even if a condominium building that is located in a designated high-flood zone has been strategically elevated, harder to protect it from rising groundwater or nearby water bodies. Broad CAT hazard assessment might still label the building as high-risk, irrespective of the building’s architectural and geographical advantages that reduce actual flood risk.

Similarly, a property deemed “unprotected” by Canada’s Fire Underwriters Survey (FUS) may face higher premiums due to perceived fire risk. The FUS assesses the fire protection capabilities of municipalities and their fire departments. Yet, a condominium with well-maintained private hydrants and regular inspections may be far better protected than the rating suggests. These proactive measures can significantly reduce fire risk but are often overlooked in standardized insurance assessments.

In cases discussed above, an experienced insurance broker is an invaluable ally for the board of directors and property manager. As they can advocate for the corporation by highlighting local factors that mitigate perceived risks—such as infrastructure improvements, community resilience initiatives, or historical data that contradicts broader trends. By presenting a detailed, localized risk profile, a knowledgeable broker can negotiate better terms and potentially lower premiums. Their expertise allows them to tailor insurance solutions that reflect the true risk of a property, ensuring fair and accurate coverage.

The insurance market is highly competitive, offering both opportunities and challenges. Global events—such as economic downturns, geopolitical tensions, or widespread natural disasters—can create volatility, affecting premiums and coverage availability. Insurers may prioritize global risk trends over local realities, resulting in less customized solutions for condominium corporations.

However, the current shift from a hard market (characterized by high premiums and strict underwriting) to a softening market presents new opportunities. As insurers become more flexible, condominium corporations can reassess their insurance strategies and potentially secure better coverage at more affordable rates.

An experienced broker plays a critical role in navigating these market dynamics, as they can help ensure the corporation receives cost-effective, comprehensive coverage that addresses all aspects of insurance—from property protection to liability coverage. Additionally, brokers can advise on risk mitigation strategies that enhance the property’s insurance profile. This might include infrastructure upgrades, emergency preparedness plans, or engagement initiatives that demonstrate resilience and reduce perceived risk.

While global insurance trends can influence local premiums, a broker with condominium-specific expertise can help corporations navigate these complexities effectively. By advocating for each property’s unique circumstances and leveraging their industry knowledge, brokers can develop optimized insurance strategies that reflect the true risk profile. This proactive approach not only helps manage premium fluctuations but also ensures financial stability and peace of mind for all residents.

Tricia Baratta
Commercial Insurance, Gallagher Canada