Insurance is certainly one of the budget items that causes the most teeth-gritting. On one hand, it's generally quite expensive; on the other, it's something that ideally remains unused in the distant background. That said, condominium syndicate insurance is—legally—mandatory, so people choose it as a necessary evil. Fortunately, advertisers flood us with insurance ads, so syndicates will have plenty of choices! Not so fast...
While it's true that there are countless insurance ads, it's also true that not all insured profiles are the same, and insurers don't address all types. Let's look at this.
Fewer insurers
Over the past 30 years—at least—we've seen a movement of mergers and market consolidation. As a result, there are far fewer insurers today than there were a few years ago. Fewer insurers necessarily means fewer choices. Fewer choices usually mean a higher price or less attractive options.
Less capacity
Capacity is—broadly—the monetary value an insurer can cover in the event of a claim. Capacities evolve slowly and are generally limited to the same amount for several years. The problem is that with the rampant inflation the construction market has experienced in recent years, capacities have not kept pace with inflation. So there's a lack of capacity in the market. Another phenomenon exacerbating this issue is densification. A more densely populated area influences the calculation of capacity or, simply (and too often), a construction of too high a value cannot be handled by a single insurer.
Less appetite
Obelix said, "When the appetite is there, all is well." In insurance, it's somewhat the same. An insurer's appetite is its interest in insuring a property. The condominium syndicate, for several reasons but especially because of the frequency of claims and the complexity of settling them, is not to the liking of most insurers.
More underwriting standards
Even if an insurer wants to insure syndicates and has the capacity to insure yours, it will not necessarily do so. Most insurers will be restrictive about the type of wiring, piping, presence of fireplaces, age of building components, past claims, etc.
So the bottleneck of the funnel is always narrower: it takes an insurer who has the capacity, the appetite, and underwriting standards favorable to your syndicate. In the end? You'll generally have one—maybe two—insurers who will perhaps offer one, rarely two feasible options... sometimes even none. To avoid being left high and dry, be insured by a competent broker who has access to more insurers, knows about condominiums, and can advise you both in emergencies and on long-term insurability. This broker will be your best ally.
Charles-Antoine Carra, CPA
Damage insurance broker
514 374-9944 #259
3737 Crémazie Est, bureau 1001, Montréal QC H1Z 2K4
