November 10, 2021 - It's well known, Covid has been blamed for a lot. Your favorite restaurant is now closed three days a week? It's because of Covid. There's a two-hour wait to talk to a representative at a call center? It's because of Covid. Is there a chlorine shortage for the pool? It's Covid's fault. Hurry up and buy your winter tires, Christmas toys, and storage cabinet because all of this might soon be in short supply because of... Covid!
And what does your condo have to do with all this? Well, know that whether made of wood or concrete, tall or long, no condo will be able to avoid Covid...
The good news
But first, the good news. Since the beginning of the pandemic, insurers have made significant profits that they absolutely did not anticipate. First in auto insurance, as there was a drop in the number of accidents due to a marked decrease in road traffic because of telecommuting. Because of this same telecommuting, there was also a relatively significant decrease in residential claims due to an increased presence at home. Of course, fewer claims should translate directly into less money spent by insurers. However, it's not that simple because this is when the diagnosis comes in: Your condo has caught Covid.
The bad news
Since the beginning of Covid, significant material shortages have literally caused prices to skyrocket. For example, the famous 2x4, which cost less than $3 before the pandemic (and always has), was seen at $11.50 15 months later. The other main material of a residence: concrete, which also became scarce on construction sites. A shortage means an imbalance of supply and demand and an increase in prices. A shortage means delays in supply and an increase in costs, and therefore prices. And if you had steel in your condo? Its price doubled during the pandemic. In a condo, apart from wood and-or concrete and-or steel, there's gypsum (shortage), paint (shortage), copper (shortage), and a whole bunch of other components that are probably in shortage now or soon.
But the problem is even more significant in the construction field. Covid led to delays on construction sites at the time of lockdown. Then, many people who benefited from unexpected savings during this period took the opportunity to embark on construction and renovation projects. Finally, as in all fields, construction is faced with a significant problem of labor shortage (that's the word of the day). These scarcity factors significantly increase the construction bill for your condo (and all other types of housing).
In the event of a claim, the work will take longer, and the subsistence expense bill will increase. Your condo will cost more to rebuild or restore. Its reconstruction cost will need to be adjusted accordingly, and necessarily, the insurance bill will increase. And if the syndicate omitted to do so to save money? Bad idea. I invite you to read Law 141 on this subject.
So there you have it, even if you're double vaccinated, you're not safe. Your condo has caught Covid... Did it catch it from your car? Your boat? Your bike? Because they have it too, Covid...
To get a clear picture and access to a range of markets, contact an insurance broker. They will guide you through the insurance markets and coverage options.
Charles-Antoine Carra, CPA
Damage insurance broker
514 374-9944 #259
3737 Crémazie Est, bureau 1001, Montréal QC H1Z 2K4
