Ontario, Canada (CU)_ The costs of several things have increased as a result of the pandemic, inflation, and supply chain issues, and now it appears that home insurance will also raise this year. Henry Lof at insurance comparison website RatesDotCa told the media, “We do anticipate seeing larger than normal increases in 2022″. According to Lof, the industry anticipates a 5% increase in home insurance premiums in 2022, with some insurance firms increasing premiums by 10% or more.
As per the website, $1,342 was the average annual cost of home insurance in Ontario in 2021. There may be a $67 increase to $1,409 this year, but Lof noted that some companies may increase more than this. One of the major causes for the price increases is the increased risk of severe weather as a result of climate change. In July, a tornado that wiped out Barrie, Ontario, resulted in $100 million insurance losses. British Columbia’s flooding in November was the most extreme weather event in the entire history of the province, resulting in losses worth more than $450 million.
Rob de Pruis, with the Insurance Bureau of Canada (IBC), told the media, “We do know across Canada in 2021, there were about 2 billion dollars of severe weather claims that were incurred from coast to coast”. While it may be inconvenient for clients to see their rates increase even if they have not filed a claim, the industry asserts that when large losses occur, premiums for all customers will increase.
Lof said, “The underpinning concept of insurance is spreading the losses of the few among the many”. According to IBC, inflation, supply chain issues, and the increasing cost of rebuilding a house are the major reasons for premium increase. Several homeowners have also made improvements to their homes during the pandemic, increasing their value.
According to RatesDotCa, the prices are increasing for a variety of reasons: renovations have raised the value of homes; the cost of home replacement has increased; the cost of building materials has increased; and climate change and extreme weather have resulted in huge insurance losses. Clients are advised to inquire about available discounts and to shop around to see if a better deal can be found. de Pruis said, “Across Canada, there are 200 insurance companies selling home, auto and business insurance, so there is quite a bit of competition”.
Additionally, homeowners should contact their insurer to determine whether a security system, a good credit score, or bundling their home and auto policies can save them money. Flooding is one of the major insurance claims, and the client should ensure that they have the proper flood coverage, because there can be major differences between policies when it comes to water damage. Customers are cautioned not to shop solely on price but to carefully compare policies before buying.
