Rising condo insurance, how water risk mitigation can help

A tightening market meets rising demand

As more of the population moves to vertical living in cities like Toronto and Vancouver, demand for condos keeps growing. Condo corporations now face a new pressure on top of it: insurance. Carriers have tightened controls and restrictions in recent years, and corporations that once enjoyed low deductibles are seeing sharp increases at renewal. Brokers are having to get creative, and risk management and technology are central to the answer, especially for water.

Water is the driver

Water damage is one of the largest sources of property insurance loss for condominium corporations. As Aon's Peter Kennedy put it in Canadian Underwriter, "Toilets overflow. Sinks back up. The washer or dishwasher has an overflow on the 10th floor, the water can run all the way down to the bottom floor." His prescription points the same direction the market is moving: "water detection and shutoff systems will automatically turn off the water in units if unusually high levels of water are detected." For the full underwriting picture, see why water is the leading cause of building loss.

Risk varies by building

Not every building carries the same exposure. A 30-storey tower with many fixtures and appliances per unit is riskier than a four-storey building. A building over 20 years old typically has a higher risk profile than a new one. Climate, major renovations and a history of previous water events all push the profile up. Knowing where your building sits is the first step to managing the premium.

How mitigation helps

A building-wide monitoring and leak protection system that watches both common areas and individual units gives boards the oversight to protect residents and keep claims down. Just as important, it gives carriers the confidence to continue coverage or hold deductibles at a reasonable level, because a documented, monitored building is a measurably lower risk. The full method is in our pillar, how to reduce water damage losses with proactive risk management, and the board-specific view is in how leak protection protects your building and residents.

Frequently asked questions

Why are condo premiums rising so fast? Water is a major driver, alongside higher replacement costs and construction expenses. Carriers have responded with higher deductibles and closer scrutiny.

Can monitoring actually lower our costs? It can support continued coverage and more reasonable deductibles by giving carriers evidence of a lower-risk, actively managed building.

What raises our building's risk profile? Height and unit count, building age, climate, recent major work and a history of prior water claims all increase it.