108-5455 152ND STREET SURREY, BC V3S 5A5
TEL. 604 575 5474        FAX 604 575 5476
EMAIL admin@leonismgmt.com
October 2012

General Information with Regard to Strata Corporation Insurance Coverage

For the benefit of Owners our Company would like to summarize, in a general way, the insurance coverage of a Strata Corporation for your reference. As well, we would like to advise Owners of their potential responsibility in the event a) damage is caused and is either not covered by the Corporation's policy as a specific exclusion, b) damage repair costs are below the applicable insurance policy deductible amount and no claim is filed or c) if a claim is filed and an Owner is responsible to reimburse the applicable deductible to the Strata Corporation.

The Strata Property Act requires a Strata Corporation to obtain and maintain insurance for the buildings, common facilities and any insurable improvements owned by the Strata Corporation to their replacement value against fire and against other perils as are usually the subject of insurance. Accordingly, a Strata Corporation has an insurable interest in the buildings, the common property, common facilities and assets of the Corporation as they were originally constructed, including original fixtures and fittings.

The Strata Property Act also sets out that a) the Strata Corporation; b) the Owners and tenants from time to time of the Strata lots on the Strata plan; and c) all persons normally occupying the Strata lots shall be deemed to be included as the named insured on a policy of insurance.

Notwithstanding the above, an Owner may obtain insurance for loss or damage to their Strata lot against fire and other perils in excess of insurance obtained by their Strata Corporation. An Owner may also obtain insurance for loss of rental value of their Strata lot. The foregoing does not restrict the capacity of an Owner to insure their Strata lot for any peril in excess of insurance held by a Strata Corporation.

For clients of Leonis Management, the insurance policy maintained by your Strata Corporation meets the requirements of the Strata Property Act. Copies of the policy wordings are held by your Strata Council, our company as Agents and your Corporation's insurance Brokerage.

Owners may have questions as to what they may be responsible for in case of a potential claim.

Firstly, a Strata Corporation insurance policy coverage is on an "All Risk" basis. The insurance underwriters agree to insure against all risk of direct physical loss or damage excepting those perils excluded.

For example a Strata Corporation insurance insures the Corporation against direct physical damage caused by fire, lightning, windstorm, smoke damage, hail, falling objects, malicious damage, water escape, sewer back up, freezing, explosion, theft, landslide, flood, earthquake, riot and vandalism as examples of commonly insured perils.

Should damage be caused by perils that are specifically excluded by a Strata Corporation insurance policy, an Owner may be required to contribute all or part (relative to the unit entitlement of their Strata lot) of the costs to repair such damage. Excluded perils typically include such occurrences as: settling, expansion, contraction, moving, shifting, defective construction, faulty material wet and dry rot.

The most common occurrence where an Owner may become responsible for all or part of damage repair cost is where damage is caused to the interior of a Strata lot and the amount of repair cost is below the applicable insurance deductible as set out on the insurance coverage's. For example damage to a Strata lot may originate from within the Strata lot, if the damage repair costs either do not exceed the applicable deductible or result from a specifically excluded peril, that Strata lot Owner could be responsible for the damage repair costs. This same example could also hold true should damage to the common property result from either the actions or negligence of an Owner, their tenants or guests.

The Strata Corporation carries comprehensive general liability coverage. Under the terms of this coverage, the Strata Corporation is insured against sums that it may become legally obligated to pay by reason of liability imposed by law for damages due to bodily injury or property damage to a third party. The Strata Corporation is covered for the civil defense costs, which may be brought against the Corporation due to bodily injury or property damage.

Owners should be aware that the Strata Property Act and applicable Strata Corporation Bylaws provide that an Owner can be held responsible for reimbursement to the Strata Corporation the deductible portion of a claim filed.

Owners will want to be sure that the personal insurance they carry for their personal belongings and liability is adequate in these circumstances.

Strata lot Owners should personally insure all of their personal belongings that are brought with them into the Strata lot, i.e., furnishings, clothing, appliances, curtains or draperies, jewelry etc.

Strata lot Owners should personally insure all "betterments and improvements" made to their Strata lot over and above original construction. Betterments and Improvements include the upgrading of fixtures or fittings within the Strata lot, i.e., feature walls, floor coverings and wall coverings. Betterments and Improvements also include such items as solariums, glassed in balconies etc. These items should be insured to their replacement value by the Owner.

A Strata lot Owner should also personally insure against such perils as additional living expenses, Special Levies/Assessments, Levy of deductible and of course, personal liability.

This general information is not intended to be applied to a specific Strata Corporation or a specific incident or occurrence. Each incident or circumstance is to be considered as to its specifics and the specifics of the policy or insurance of that particular Strata Corporation.


E. & O.E.