Strata Insurance in BC: A Council's Guide

What the strata policy has to cover

Start with the statute rather than the brochure. Under section 149 of the Strata Property Act, the strata corporation must obtain and maintain property insurance on:

• common property
• common assets
• the buildings shown on the strata plan
• fixtures built or installed on a strata lot by the owner developer as part of the original construction

That third item is the one councils and owners most often miss. The strata's policy is not limited to hallways, elevators and the roof — it generally covers the original building, including the inside of strata lots. The insurance must be on the basis of full replacement value, and the corporation must also carry liability insurance (BC government guidance on strata corporation insurance).

The fixtures rule does not apply to a bare land strata plan, where there is no building shown on the plan to insure.

What it doesn't cover, and what owners need

Section 161 sets out what an owner may insure, and it is a good checklist to hand to owners once a year:

• their strata lot and the original fixtures, for perils the strata policy does not insure, or for amounts above what it covers
• fixtures that were not part of the original construction
• improvements to original fixtures — the renovation, in other words
• loss of rental value
• liability

Most owner policies also offer coverage for a deductible assessment or chargeback. Telling owners this before a loss is considerably cheaper than explaining it afterwards.

The practical shape of it: the strata policy is for the building, the owner's policy is for what they changed, what they own, what they owe, and what they might be liable for.

The deductible is a common expense first

Councils budget for the deductible, not just the premium, and the statutory default matters. Under section 158(1), payment of a deductible on a claim against the strata's insurance is a common expense, contributed through strata fees. Section 158(2) preserves the corporation's ability to sue an owner to recover it where that owner is responsible for the loss — that recovery is the owner's liability in full and has nothing to do with unit entitlement.

Two points councils get wrong in both directions: an owner is not responsible merely because the loss started in their strata lot, and a chargeback is a claim to be established rather than a charge to be posted. Our guide on who pays the strata insurance deductible works through both.

Section 158(3) is the relief valve. No owner approval is required for a special levy or a contingency reserve fund expenditure to cover a deductible the strata must pay to repair or replace damaged property, unless the strata has decided not to repair under section 159. A large deductible does not have to wait for a general meeting.

What a council should actually do at renewal

• Read the deductibles, not just the premium. Water-damage deductibles in BC are frequently five or six figures and they drive every decision after a loss.
• Check the insured value against the depreciation report. Full replacement value is a statutory standard, not a number to leave stale.
• Ask what changed. New amenities, EV charging, short-term rental activity and deferred building-envelope work all affect risk.
• Confirm what the policy says about owner improvements, so the boundary between the two policies is known before it is tested.
• Tell owners annually what the strata policy covers and what their own policy needs to fill.
• Keep the policy, the schedule and past claims retrievable. Tools like SearchStrata can pull coverage and deductible details out of a policy and past minutes when a claim is moving quickly.

Questions councils ask

Does the strata policy cover damage inside a unit? Generally yes for the original building and original fixtures — section 149 covers buildings shown on the strata plan. Improvements and contents sit with the owner under section 161.

Do we have to insure at full replacement value? Yes, that is the statutory basis for the property insurance, subject to the exceptions in the Act.

Can we raise the deductible to lower the premium? You can, and many stratas have. Understand it as moving risk onto the strata's own budget: a higher deductible is a larger common expense the next time a claim happens.

Councils that keep the policy, the claims history and the deductible decisions in one place — the sort of record-keeping ManageStrata is built around — spend far less time reconstructing coverage during a claim. For related reading, see how to handle a strata insurance claim and water damage: who pays for what.

This article is general information about BC strata law, not legal advice; verify against the current Strata Property Act and Regulation or consult a BC strata lawyer or your broker.