In September of this year, Carriere received a letter from the Cedarwoods Condominium Corporation explaining that the board had struggled to find an insurer to cover the complex.

The lone policy on offer came at a high cost, yet only promised coverage for a fraction of the complex’s $65-million appraised value. The condo board accepted the offer.

As an owner, Carriere was hit with a $6,000 special assessment — six months of $1,000 payments — to cover her share of the insurance premium. It was a hit she couldn’t take.

The condo board got only one quote from an insurer and it came with a premium of $925,000 for the whole complex. It struggled to get an insurer because it’s considered «high risk.» In the last three years the complex made four insurance claims totalling $11.7 million. Two were related to the 2016 wildfire, one was a water claim and the last was another small fire.

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It’s a problem that has been facing many condo boards in the regional municipality of Wood Buffalo in the wake of the Fort McMurray fire.

In July, Carriere and her husband had left Fort McMurray for work. They moved in with her dad in Kamloops, but they were still keeping up with payments on the condo, which was registered in her name.

«We’ve been struggling for the last year,» she told CBC News. «Then we got this letter and it was just kind of the final straw. OK, we’re going to lose the house. There’s not anything we can do anymore.»

It was just kind of the final straw. OK, we’re going to lose the house.– Kaleena Carriere

Every month Carriere was making mortgage payments of $1,800, plus $450 in condo fees, $300 for heat, $100 for personal liability insurance and $50 for municipal services.

Paying another $1,000 a month wasn’t an option. In a Facebook post, Carriere said she stopped making payments on her home and «accepted that the bank was going to take it from me.»

«I didn’t believe it,» Carriere told CBC. «I cried when I came to the realization that this was happening.»

Carriere said she considered selling the condo, but figures she would have ended up deep in debt.

She had paid $350,000 for the home but believes it is now worth less than $200,000 because of declining property values in Fort McMurray.

In a statement of claim, her bank alleges she still owed $278,000 on her mortgage when she stopped making payments.

Condo insurance is mandatory

In Alberta, condominium boards must carry insurance on all units and common property against loss resulting from destruction or damage caused by fire, lightning, windstorms, hail, explosions, water damage and other perils. The coverage must be for replacement cost value. Owners pay the insurance costs through their condo fees.

The Cedarwoods condo board was offered $10 million of coverage, even though the appraised value of the 156-townhome complex was $65 million. That’s despite the insurance premium of $925,000.

In 2018, the board had been able to get insurance coverage for the full property appraisal at a cost of $142,000.

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Dan Edwards, vice-chair of the Cedarwoods condo board, said the board got only one insurance offer and had to take it, in an effort to comply with the Alberta Condominium Property Act.

«You have to accept it whether you like it or not,» said Edwards, who owns a condo in the complex. «I can’t make an insurance company offer me insurance.

«No one wanted to pay this.»

Not enough coverage for a disaster

Edwards said if there’s a disaster that destroys everyone’s property, the board doesn’t have enough coverage to rebuild and everyone «will likely be out on the street.»

«We don’t understand what’s going on. We’re all hurt by this,» he said.

He’s not sure what the legal ramifications of not having enough coverage are because this is «uncharted territory,» he said.

Edwards said the board is still working with a lawyer and trying to come up with a solution to get full coverage at a reasonable price.

Owners should be worried, lawyer says

Edmonton lawyer Robert Noce said owners of Cedarwoods condos should be worried.

The condo board’s decision to accept insurance coverage that only accounts for one sixth of the appraised value is so uncommon that he’s never heard of it happening before, Noce said.

«It’s impossible to think that an insurer would only insure a portion of that, knowing full well that the value of the property is significantly higher,» Noce said. «I can’t think of any board, individual board members, that would be so negligent and expose themselves to personal liability by making such a decision.»

Owners and the condo board should immediately seek legal advice, he said.

«I would truly hope that that particular condominium corporation has sought legal advice to protect them from what will inevitably be exposure at a personal level of the board members if they can’t get this issue resolved.»

In October, Wood Buffalo councillors voted to lobby the provincial and federal governments in an attempt to ensure that condo boards are able to secure complete, affordable insurance coverage.

Adam Hardiman, spokesperson for the Regional Municipality of Wood Buffalo, confirmed the municipality sent letters to members of Parliament, local MLAs and the prime minister’s office, among others.

Crisis brewing, mayor tells PM

In a letter to Prime Minister Justin Trudeau, Mayor Don Scott said the lack of affordable condo insurance options is quickly becoming a crisis that will affect other parts of Canada, «particularly those that have experienced flooding or wildfire.»

Rob de Pruis, director of consumer and industry relations with the Insurance Bureau of Canada, said in an email that IBC is still talking to insurance companies and government about regulations for condo insurance.

«We understand the seriousness of this issue and we are doing everything we can to address individual circumstances,» de Pruis said.

The government says it’s still working with insurance providers about the issue, and Finance Minister Travis Toews has «asked industry to work to find solutions for condominium owners in the region,» Service Alberta representative Tricia Velthuizen said in an emailed statement.

Carriere said it’s unlikely she’ll be able to buy a house again for years. She received an outpouring of support after posting about her bankruptcy on Facebook. She said dozens of people told her they were going through the same thing.