Extreme weather caused by climate change has resulted in millions worth of insured damages, pushing up premiums.  Many provinces saw extreme weather hit them and this caused a major rise in claims.

Although 2021 marked a year of many catastrophic weather events, two notable ones include the tornadoes that tore through Barrie, Ont., in July 2021, costing $100 million in insured losses. Also. flooding in B.C. in November 2021 cost more than $450 million, per IBC’s estimates.

“There was significant severe weather across the country last year and, in fact, it’s over $2 billion dollars in insured losses,” says Rob de Pruis, director of consumer and industry relations at Insurance Bureau of Canada (IBC). “That includes all kinds of events, from tornadoes in Ontario, flooding and wildfires in BC, a big hailstorm in Alberta, and another hurricane event on the east coast, as well as many others across the country.”

With people bunkered down during the pandemic and not travelling, insurers note that more people were staying home and making improvements to their home.

However, home renovations increase the cost of rebuilding, which in turn drives premiums up. According to Statistics Canada, Canadians across the country applied for 212,523 residential alteration and improvements permits from January to November 2021.

If your replacement cost is increasing, your premiums just fall in line with replacement costs.

Pandemic-induced supply chain disruptions and changes in consumer purchasing behaviour have led to rises in building material costs such as lumber, RatesDotCa said, which in turn drives up insurance rates.

Insurance rebuilds are often more expensive than the construction costs arranged through private contractors, since insurers must rebuild quickly to move the homeowner back into their home. Depending on the policy, insurers may also be paying homeowners for accommodation costs during the rebuild.

De Pruis lists inflation costs of materials, the age of your home, your postal code, and fluctuations in crime rates as other factors that affect home insurance premiums.

Insurers issue a note of caution about predicting home insurance rates.

As the article notes, since home insurance pricing is unregulated in Canada, it’s difficult to determine exactly how much home insurance premiums will rise by, but premiums are definitely on the way up.

Canadian Underwriter also reported that it is hard to predict rates. “It’s almost impossible to predict future home insurance rates, because there’s so many factors and influencing and pressures that are on premiums, and they vary across the country as well,” the article noted.

Some insurers offer discounts that can help bring down premium prices, including discounts for properly installed and monitored security systems, fire alarms and claims-free discounts. Also, insurers can run a soft credit check that may lead to lower premium prices if a homeowner has good credit. Another option for people is to Increase their deductible. Normally, the higher your deductible, the lower your insurance premium would be. Policyholders should choose a deductible that they are able to pay in case of an insurance emergency.  With the rising cost of living, including insurance, it’s important for us all to spot ways to save money. One way individuals and companies can save money on insurance is through group discounts. Some companies and professional organizations offer group rates for insurance. This is true if you are an alumni of a specific university or part of an association. Consumers can save by bundling home and auto insurance together with the same provider. The article highlighted that it’s important for policyholders and insurance representatives to connect and review their policy on an annual basis.

At Leaders, we pride ourselves on the relationships we have with clients. We want to help you find the right insurance for a competitive price. We always try our best to ensure that you have the right level of protection for your needs, and we survey a range of providers to find you the best rate. Contact us today to learn more and for us to provide you with a free quote and consultation for your insurance.