Tariffs impact insurance appraisals for Manitoba condominium corporations

Article from Volume 12, Issue Number 4, 2025

Tariffs impact insurance appraisals for Manitoba condominium corporations

By Devin Baker | Other articles by Devin Baker | Feature

Maintaining adequate insurance coverage is a key part of a condo board’s responsibility

Section 185 of Manitoba’s Condominium Act requires condominium corporations to obtain and maintain insurance on the corporation’s units (excluding owner improvements), common elements and assets. This insurance must cover the full replacement value, ensuring that in the event of significant damage or loss, the corporation can restore the property without imposing unexpected financial burdens on unit owners. Establishing this replacement value depends on a current and professional appraisal.

Tariffs have driven up the costs of key construction materials such as steel, aluminum and lumber — materials critical to construction and repair projects across Manitoba.

Winnipeg: The city has seen steady condo and mixed-use development downtown and in neighborhoods such as Osborne Village and St. Boniface. Rising steel and concrete costs have made new construction significantly more expensive, which in turn affects rebuilding costs for existing buildings.

Brandon and southern Manitoba: Agricultural tariffs and transportation costs are pushing up the price of building supplies, making insurance valuations particularly important for condo corporations in growing communities.

Northern Manitoba: Remote communities, such as Thompson and The Pas, already face higher costs for shipping construction materials. Tariffs and inflation compound these expenses, amplifying the financial risk if insurance coverage is not kept current.

Many insurance policies include a co-insurance clause, requiring the insured value to be within a certain percentage of the actual replacement cost. If this requirement is not met, penalties might apply, reducing the payout in the event of a claim. Regular insurance appraisals help ensure that coverage amounts remain accurate, mitigating the risk of co-insurance penalties and ensuring the corporation can fully recover from losses.

Board members of condominium corporations in Manitoba have a fiduciary duty to act in the best interests of the corporation and its unit owners. Maintaining adequate insurance coverage is a key part of this responsibility.

In Winnipeg, where large condominium complexes house hundreds of unit owners, inadequate coverage could leave boards facing multi-million-dollar shortfalls. For smaller corporations in rural communities, even modest underinsurance could strain owners with unmanageable special assessments.

By obtaining regular insurance appraisals, boards demonstrate due diligence in protecting their corporation’s assets and financial stability. This proactive approach can also strengthen a corporation’s relationship with insurers, potentially leading to more favorable policy terms.

Given the rising replacement costs driven by tariffs, it is crucial for Manitoba condominium corporations to ensure their insurance coverage accurately reflects current values. Regular insurance appraisals are not only a best practice but also a critical component of compliance with Manitoba’s Condominium Act.

By staying informed and proactive, corporations can protect their assets, fulfil their legal obligations, and provide peace of mind to unit owners across the province.

Devin Baker is manager of business development for Suncorp Valuations. He works with a team of approximately 150 staff across Canada and the U.S. specializing in appraisals for the purpose of insurance placement, financing, tangible asset reporting, purchase price allocation, and reserve fund studies.

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