Who Pays the Strata Insurance Deductible in BC?

What the deductible is, and why it matters so much

A strata insurance deductible is the amount the strata corporation pays before its policy responds to a claim. Water-damage deductibles in BC are commonly five or six figures, which is why the question of who ultimately absorbs it causes more disputes than almost anything else in strata life.

The starting point is what the policy covers at all. Under section 149 of the Strata Property Act, the strata corporation must insure common property, common assets, the buildings shown on the strata plan, and fixtures built or installed on a strata lot by the owner developer as part of the original construction. That is broader than "common property" — the original building, including the inside of strata lots, is generally on the strata's policy. Our council's guide to strata insurance covers the policy itself in more detail.

The default: the deductible is a common expense

Section 158(1) is the rule most owners have never heard. The payment of a deductible on a claim against the strata corporation's insurance is a common expense, contributed through strata fees. Strata fees are set by unit entitlement, so this is the one route in which unit entitlement has anything to do with a deductible.

In other words, unless the strata recovers the money from someone, the building pays — in the same proportions everyone already pays for everything else.

The exception: recovery from a responsible owner

Section 158(2) says subsection (1) does not limit the strata corporation's capacity to sue an owner to recover the deductible where that owner is responsible for the loss or damage.

Three things follow, and they are where most chargeback disputes go wrong:

• It is the owner's liability in full. A chargeback to a responsible owner is not divided among owners and is not apportioned by unit entitlement. Merging this with the common-expense rule above is the single most common error in strata writing on this subject.
• Responsibility is not automatic. The Act permits recovery from an owner who is responsible. It does not make an owner responsible merely because the water started in their strata lot. Responsibility usually turns on negligence, or on a bylaw that validly imposes the cost.
• It is a claim, not a self-executing charge. The Act's verb is "sue".

What a chargeback is not

A strata corporation cannot simply add a deductible chargeback to an owner's account and treat it like an unpaid fee. Section 116 lists what a lien may be registered for: strata fees, a special levy, the cost of work the strata does under section 85, and the strata lot's share of a judgment against the strata corporation. A deductible chargeback is not on that list.

So a council that believes an owner is responsible generally needs to establish that, and pursue the amount — in practice through the Civil Resolution Tribunal — rather than assuming the debt attaches to the strata lot.

Equally, an owner who disagrees with a chargeback does not appeal it at a general meeting. They can request a hearing at a council meeting under section 34.1, and take the dispute to the CRT. There is no statutory right to have owners overturn a council decision at an AGM.

Paying a deductible you didn't budget for

Section 158(3) is the provision councils most often miss. Despite any other section of the Act, no owner approval is required for a special levy or an expenditure from the contingency reserve fund to cover an insurance deductible the strata corporation must pay to repair or replace damaged property — unless the strata has decided not to repair or replace under section 159.

That is a genuine exception to the usual 3/4 vote for a special levy, and it exists precisely because a large deductible cannot wait for a general meeting.

What owners should carry

Section 161 lets an owner insure what the strata's policy does not: improvements and non-original fixtures, contents, liability, loss of rental value, and amounts or perils the strata policy excludes. Most owner policies also offer coverage for a deductible assessment or chargeback — the specific product name varies by insurer, and it is worth asking for by description rather than by label.

Telling owners this once a year is cheaper than explaining it after a loss. Tools like SearchStrata can pull the deductible figures out of a policy and past minutes when a council needs to answer an owner quickly.

Questions owners ask

Who pays the deductible by default? The strata corporation, as a common expense shared through strata fees, unless it recovers the amount from an owner who is responsible.

Does damage starting in my unit make me responsible? No. Origin is not responsibility. The strata has to establish that you are responsible — usually negligence or a valid bylaw — before it can recover from you.

Can the strata lien my unit for a chargeback? Not under section 116, which does not list chargebacks. The strata's route is to establish responsibility and pursue the claim.

Councils that record the cause, the reasoning and the decision in one place — the kind of record-keeping ManageStrata is built around — are the ones that can still explain a chargeback two years later when it is challenged.

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.