Property owners expect further increases in their insurance premiums in 2024, a situation which will have repercussions for tenants.
Annual premium increases have varied between 10% and 35% in recent years.
The Corporation of Real Estate Owners of Quebec (CORPIC) explained that property tax increases and increases in insurance premiums on buildings are absorbed in full by tenants. The mechanism applies with the rent price setting grid of the Administrative Housing Tribunal.
Many property owners are trying to curb these increases in insurance premiums by increasing deductibles.
The explosion in the cost of insurance for real estate owners is explained by the state of the rental real estate stock which is old in the province, according to the chairman of the board of directors of CORPIC, who is also a general contractor, owner and manager real estate for over 20 years.
“These are buildings where disasters are more and more frequent. In a context of global warming where we have more and more episodes of freezing and thawing during the winter, this adds to the risks of disasters which are more and more frequent,” said indicated Éric Sansoucy.
The regulatory framework has had an impact on the ability of certain owners to renovate or carry out major repair work on their buildings, according to CORPIC. The rules make it difficult to be profitable when major work is carried out.
The context of climate change also has the effect of increasing the risk of claims.
“We expect that these are still growing risks, but even more than that, what exacerbates the situation is the increases in renovation costs. These are the increases in construction costs, therefore, it is an industry where there is a labor shortage, it is an industry where costs are increasing. So, when the insurer calculates how much it costs to rebuild or renovate, well, this year, its calculation will give higher figures,” added Mr. Sansoucy.
It is also sometimes more difficult for property owners to find insurance coverage. According to CORPIC, insurers tend to specialize.
2023-12-20 16:20:31
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