Changes to Strata Property Act 2023
Changes to Strata Property Act 2023 - Impact on Insurance
In January, the BC government announced changes to the Strata Property Act to assist in ensuring there are adequate funds available in contingency reserve funds for property upgrades. The hope is to reduce issues with maintenance so there are fewer insurance costs in years to come.
Details on the Amendment
“People living in stratas deserve to have peace of mind that their strata corporation has appropriate reserves to do routine maintenance and keep strata insurance costs down,” said Ravi Kahlon, Minister of Housing. “The overwhelming majority of stratas are doing just that, but a small number of strata corporations that are underfunding their contingency funds and putting owners at risk of surprise fee hikes and higher insurance costs. While the vast majority of strata corporations are already meeting these requirements, we’re ensuring that those outliers are taking steps to protect themselves.”
In 2020, BC introduced changes to the Strata Property Act to help stratas better manage strata insurance costs, including enabling these regulatory changes. Strata corporations in BC are required to have a contingency reserve fund (CRF) to pay for infrequent common expenses, such as maintenance work and emergencies. These new rules will increase the minimum amount that developers and strata corporations are required to contribute to a CRF, from 5% to at least 10% of the annual operating expenses every year. These changes will take effect on November 1st, 2023.
The new minimums were set with the advice of strata managers and homeowner representatives. According to strata industry experts, the vast majority of approximately 34,000 strata corporations in the province exceed this minimum amount and will not be affected by this change.
The Province is also enacting changes to the Form B Information Certificate. A summary of the strata corporation’s insurance coverage must be included in the form, effective April 1, 2023. This will make it easier for prospective buyers and strata owners to know whether the property is adequately insured, and the amount of insurance individual owners need to purchase.
What about new Developments?
Developers are required to include a CRF contribution in a new building’s interim budget, which under these changes will need to be equal to at least 10% of the operating expenses. This will prevent developers from advertising unrealistically low strata fees to prospective buyers and avoid unexpected increases in strata fees in the building’s first years.
For the small number of strata corporations that need to contribute more funds to their CRF to meet the new minimums, this will reduce their risk of strata insurance claims and premium increases, and significant special levies on short notice.
How May this Impact Insurance in BC?
For the most part, this change will have impact to strata owners since most Strata Corporations are already meeting the 10% CRF contribution. That being said, for the Stratas that were underfunding their CRF, this may have an impact on monthly strata fees to boost up the minimum contribution to the CRF. In terms of insurance, the goal of the amendment is actually to reduce the likelihood of the need to use insurance. If proper maintenance is adhered to, the hope is that this will reduce claims linked to poor maintenance of properties. If insurance claims go down, insurance premiums normally are able to remain static without sizeable increases like we have been seeing in recent years. So, overall, the amendment by the province is a positive one for insurance.
At Leaders Insurance, we have a team of skilled brokers who help clients daily with finding the best rates for their home insurance needs. As a result, we have developed longstanding relationships with our clients for home insurance. We take the time to understand your needs and can help you as you find what is right for you. We look forward to assisting you with all of your insurance goals and requirements. Contact Us today.
Is the cost of commercial insurance rising?
Is the cost of commercial insurance rising?
Like almost everything right now, costs are rising and so is the cost of commercial insurance. If you own a business, you know all too well how high costs are getting. It is such a difficult thing to balance as you still want to stay competitive but your bottom line is getting tighter. Unfortunately, when we look at the trends for costs of commercial insurance, it does appear that commercial insurance is costing most businesses more in 2023.
What’s Driving this Rise?
Like most businesses, insurance companies have tried hard to keep costs in line with current rates. However, over the last year, the insurance industry has seen a rise in costs and this has costs losses to its expected profits. As a result, the industry is not generating the returns they would like so most insurance companies are seeking rate increases of 5% to 10% or more for some lines. However, the insurance market has a significant amount of surplus or available capital, which drives competition. While companies would like to raise prices, this competition serves as a moderating factor.
So, what can insurance buyers expect in 2023? Assuming similar exposures (payroll, property values and revenues) and a decent loss history, buyers should conservatively budget for a rate increase – the value largely dependent on the type of business one operates. The following is what you can expect for certain lines:
Property insurance
Certain properties are seeing significant increases, however. Anything remotely exposed to wildfire and flooding risk will see massive rate hikes. This affects both personal and commercial lines. Properties with wind-driven exposures are also difficult to insure. Expect flood premiums to go up significantly. Note that the replacement value of most properties has increased significantly due to inflation, so do not be surprised if your insurer insists on higher replacement cost values.
General liability insurance
This line of insurance is experiencing modest increases. However, like all lines, this can vary. Some commercial construction and life science risks may see decreases, while certain habitational and hospitality businesses have seen double digit increases.
Executive risk
This line of insurance includes directors and officers (D&O) liability, employment practices and crime coverages. In the US, the market remains competitive with 5% to 10% average rate increases expected. The exception is public D&O, which is seeing flat renewals and, in some cases, rate decreases of 10% or more.
Cyber insurance
For years, this coverage was underpriced, but now rates are going up and underwriting requirements are strict. Cyber insurance is volatile and the number of new players entering the market make it difficult to provide a general idea of what insurance buyers might expect on renewal. Based on recent experience, cyber insurance costs will likely go up substantially now that is a much sought after line of coverage for most business owners.
Professional liability insurance
This line of insurance is for your typical accountant, lawyer, architect or engineer remains in fairly good shape. There are a number of insurers competing for business and experience has been decent, but not great. Many insurers are seeking increases of 10% or more, but as mentioned above, competition is helping to soften this and most accounts are renewing with minimal rate increases.
Every business has different exposures, business practices and loss histories, all of which will affect your insurance costs. Firms that invest in loss prevention, proactive HR practices and aggressive claims management are generally looked upon more favorably by the underwriting community. The importance of risk management in controlling insurance costs cannot and should not be overlooked. In the end, while some conclusions can be made based on a macro view of the insurance industry, the best way to budget appropriately for 2023 is to have a discussion with your insurance broker.
At Leaders Insurance, we have a team of skilled brokers in the commercial insurance area. We pride ourself on the commercial insurance we offer to our clients. As a result, we have developed longstanding relationships with our clients for commercial insurance. We take the time to understand your needs and can help you as you find what is right for you. We look forward to assisting you with all of your insurance goals and requirements. Contact Us today.
Floods are Rising in BC
Floods are Rising in BC
The weather in BC over the past few years has been erratic and hard for many people. Wildfires in the summer have required families to flee their homes and floods have devastated homeowners across the province on a number of occasions. Even as recent as January, river levels were rising due to heavy rainfall on Vancouver Island, placing BC’s southwest on alert for flooding. The BC River Forecast Centre issued a flood warning for southern Vancouver Island, central Vancouver Island and eastern Vancouver Island.
Floods Becoming More Regular
The rate of flooding has risen over the past five years in BC and this has created a lot of upset and uncertainty for may people living in the Lower Mainland. The issue is that a flood that moves into a home, can create a lot of damage. No one wants to see water entering their home but living in BC requires being a little bit prepared for this happening.
How Floods Influence Insurance Premiums
In Canada,flooding is the most common and costly natural disaster, causing approximately $1.5 billion in damage to households, property, and infrastructure annually, with residential property owners bearing approximately 75% of uninsured losses each year.
Many homeowners are unprepared for flooding because they lack critical information thanks to murky real estate rules, incomplete floodplain maps and an insurance industry pulling back from high-risk areas, a Marketplace investigation has found.
The IBC estimates that anywhere from six to 10 per cent of Canadian homes are currently uninsurable due to flooding and that estimate could go up as more insurance companies update their risk assessments to account for the rising threat of climate change.
According to a 2019 federal government report, Canada’s climate is warming at double the rate of the rest of the world, and the IBC estimates that currently 1 in 10 Canadian homes is at high risk of flooding and some face possible repeated flooding over the next 20 years.
The recent flooding in British Columbia has made the issue of flood insurance coverage top of mind for many homeowners, as some residents there, unable to find coverage, turn to provincial disaster assistance, and others assess what coverage they have as the cleanup begins.
Insurance unaffordable for many
Insurability is eroding in Canada as the prices are rising so much every year. For the average family in BC, it is unaffordable to buy a home as well as cover insurance and other expenses. The rising cost of insurance is down to the higher amount of claims that are occurring on an annual basis. Climate change has caused this rise in flooding to be a new norm. This in itself is worrying as it means a greater chance for an incident at home but also a rise in premiums is likely something that is here to stay.
When it comes to insurance, you need to take the time to ensure you have all the coverage you need. If floods are worrying you, it is imperative that you checked your current policy and then request a review so you can ensure you are protected but also to receive further guidance on the policy details. You need to work with someone who you can trust and can align the insurance you get with what you truly need in BC right now.
At Leaders Insurance, we have a team of skilled brokers in the home insurance area. If this topic makes you wonder what your policy includes, we welcome your call so we can review your existing policy and ensure you have adequate coverage in the event of a flood. Don’t be left without the coverage you need when you need it most. We take the time to understand your needs and can help you as you find what is right for you. We look forward to assisting you with all of your insurance goals and requirements. Contact Us today.
Why Purchase Pollution Liability Insurance?
Why Purchase Pollution Liability Insurance?
You own a business and you want to protect it but sometimes when you are finalizing your insurance you don’t think of all the things that could happen. This is often the case with liability claims. As a business owner, you need to particularly careful about protecting yourself from getting sued as it can be a very pricey endeavour to deal with in terms of legal fees and damages. Most of the time, companies settle to minimize legal fees and this is where having the right coverage can be a very important decision when you finalize your insurance. One of the areas that is often not considered is pollution liability insurance especially if you are in a business where pollution is not top of mind. Let’s learn a bit more about pollution liability insurance through an example…
Melted Butter Spills in Canal
As noted by USA Today, a fire broke out in the butter storage room of a dairy plant in Portage, Wisconsin, on January 2nd, spreading melted butter throughout the facility and into a nearby historic canal. Crews responding to the buttery incident at the Associated Milk Producers plant deployed the same materials used in oil spills to clean up the mess.
“The spilled butter clogged storm drains and the Portage Canal, a historic waterway, with butter floating on top of the water in a 30-by-20-foot area, local officials said. No one was injured in the incident, and a hazmat team used boom absorbents used to control oil spills to clean up about 20 gallons of butter from the canal. The environmental impact from this incident has been minimal, so far, the Wisconsin Department of Natural Resources said in a statement, but officials say butter spills can have negative effects.
“They liken the impact of the butter to petroleum products,” said Karim Jaroudi, Manager, Environmental, Burns & Wilcox in Ontario. “The odor is considered a pollution event, and there could be damage to plants and animals. Anything that enters the environment that is not indigenous to it is going to be considered a pollutant and has to be remediated. When a contaminant enters a waterway, that is an even-worse-case scenario.”
While the spill was 99% contained on site, it is the sort of accident that on a larger scale could lead to thousands or even millions of dollars in loss for the company responsible, said Timothy Donnellon, Senior Broker, Environmental, Burns & Wilcox, Charleston, South Carolina. Many food companies fail to purchase Pollution Legal Liability Insurance as they may not deem their products as pollutants but if insurance coverage or this kind was covered, it would pay for these costs versus the company absorbing them.
Food Spills can be Costly
Even if a food producer is not producing something that is deemed as a “pollutant”, many of their products may have by-products that if leaked into water systems, can be very hazardous. As a result, it is important that when obtaining commercial insurance, companies consult with a skilled and educated insurance broker. A broker with this knowledge would provide guidance on areas of this kind to ensure that the company is properly covered or at least notified of the importance of this coverage before they finalize their policy.
Finding a Knowledgeable Insurance Broker
For a business owner, it is so important to develop a relationship with an insurance broker that has experience and knowledge so they can bring that to the table when you are finalizing your policy. This makes all the difference in the world. We always hope that you never have to file a claim, but at least if you do, we want to ensure you are covered for any incidents if they do come about.
At Leaders Insurance, we have a team of skilled brokers in the commercial area. If this story makes you wonder what your policy includes, we welcome your call so we can review your existing policy and ensure you have pollution liability coverage. Don’t be left without the coverage you need, when you need it most. We take the time to understand your needs and can help you as you find what is right for you. We look forward to assisting you with all of your insurance goals and requirements. Contact Us today.
Strata vs Detached Home Insurance
Is Home Insurance More Costly for Strata Owners in BC?
If you are a resident in BC and own a property, you may know a thing or two about home insurance. Home insurance has been a hot topic over the past couple of years and a lot of the buzz about it has centralized around strata deductibles. This article can help those who currently own a strata property such as a condo or townhouse, those who are looking to purchase a property shortly or individuals who are looking at purchasing a detached home. It may also provide some insight into home insurance for renters – although you may not be paying directly for home insurance or towards your monthly strata fees, if a claim is ever made and you are the occupant of the property, you may want to understand more about how strata insurance plays apart of the overall insurance coverage for the property.
Strata Insurance Policies
Insurance policies are designed to protect the purchaser from unexpected losses. Strata insurance policies are no different; they are designed to protect owners against liability for property damage and bodily injury, and in British Columbia all stratas must obtain and maintain that coverage. While insurance policies have many features, two of the critical ones are the policy premium (how much you pay up front) and the policy deductibles (how much you pay when making a claim, which often varies depending on the nature of the loss).
As many of you know, in recent years, the strata insurance market has seen premiums and deductibles skyrocket, and according to the BCFSA, that’s unlikely to change anytime soon. For strata owners, the hike in premiums impacts you directly through rising maintenance fees, but what about the impact of the change in deductibles?
The higher deductibles will affect you in two ways:
- Your strata will no longer be able to make claims that would have been covered under your previous policy deductibles.
For example, if your strata previously had an insurance policy with a $20,000 deductible and experienced a loss of $70,000 due to a water leak, you used to pay the $20,000 deductible and the insurer would cover the balance. Now, assuming your deductible has risen to $75,000, all $70,000 of the water loss would need to be paid by your strata.
This means that when something does go wrong, you are less likely to be able to rely on your insurance to help.
- You will personally pay more for strata insurance for your condo or townhouse.
On top of the higher premiums you pay via your maintenance fees, your own personal insurance policy costs will rise. This is down to the fact that in addition to covering your personal property and any improvements to your unit – used to be based on covering the strata’s previous deductible if the loss originated in your unit. This means that your insurer’s exposure was your loss plus the strata’s deductible. Now, your strata insurance policy should cover the new strata deductible, which for purposes of example may now be $75,000. With some strata deductibles rising to $250,000 or more, some owners can’t secure enough coverage at any cost. The result of this is that your own policy premiums are going to rise (and it’s likely your personal deductibles will rise too).
The bottom line for owners of strata properties is that until the market conditions change, they’ll be paying more – much more – for both their strata’s insurance and their own.
So how does this compare to home insurance on detached homes?
Overall, home insurance is rising and this is down to the rise in claims for a range of incidents in recent years – especially fires and floods in BC. Additionally, with the surging cost of living insurance costs are also rising. So, insurance will rise even if you are in a detached home.
For a detached home, you are covering the cost of home insurance for the entire property. In a strata arrangement, the strata is buying insurance for the entire strata to cover the cost of repairs to the common “envelope” as well as any liability claims. This is divided between the strata owners and the cost is added to the monthly fees strata owners pay to be part of that strata. As well, each homeowner is responsible to obtain personal home insurance for their property.
Home Insurance and Purchasing a Property in BC
Should the rising cost of strata deductibles and home insurance in BC play a part in the decision of whether to buy a detached or strata property? The answer to this question is likely that it would not. In the times we currently live in, the primary determining driver of the type of property purchased is affordability. Home insurance is an element to consider and can be costly – but it can be an ongoing factor to consider for both detached and strata properties.
When purchasing a property, it is most important to find a property that meets your needs and is a property that you will be able to afford even if costs rise. As we are seeing now with the high inflationary times and the rising cost of living, many people are in a position where they are unable to meet their basic needs. By ensuring you have a comfortable emergency fund in place and room to bear higher expenses including insurance, you will be in a better position to manage a sudden rise in household costs such as home insurance.
At Leaders Insurance, our brokers are here to assist you with finding ways to manage your home insurance and find the best policy and rates for your needs. We take the time to understand your needs and can help you as you navigate the everchanging property market when it comes to home insurance. We look forward to assisting you with all of your insurance goals and requirements. Contact Us today.
All About Earthquake Insurance
All About Earthquake Insurance
Did you know that every year there are roughly 4,000 recorded earthquakes in Canada? Many of us wouldn’t have thought that a country like Canada would be so prone to these natural disasters but experts in British Columbia (BC) warn that in the next 50 years, there is a 30% chance of a significant earthquake in the province. As a result of these global disasters, the Insurance Bureau of Canada (IBC) commissioned an Earthquake study. One of the results of the study estimated that the overall cost, following a 9.0-magnitude earthquake in BC was nearly $75 billion. The full report also quantified the number of damage Canadians could expect if faced with a significant earthquake. It demonstrated that a major earthquake would have a significant economic impact regionally as well as a domino effect on the entire Canadian economy. As a homeowner, do you know if you are protected if an earthquake strikes?
In General
Now knowing these statistics, this may be the perfect time to review your insurance policy to see if it includes earthquake insurance. It is interesting to note that earthquake coverage typically does not form part of most standard home insurance policies. It can however be purchased separately, assuming your property is eligible for the coverage. It will carry with it an additional premium amount and is always subject to a higher (separate) deductible than coverage for other perils included in your policy.
In recent years, we’ve seen the cost of earthquake insurance rise globally and here in BC. This is partly due to the rise in natural disasters, the impact from climate change and the general spike in the cost of living.
Rising costs are something we all need to consider but getting the proper coverage if an earthquake strikes, should be an important decision as a homeowner. It is important to do your research to understand if your property is at risk, based on the location of your property and the infrastructure it is built on.
As we have seen in similar disasters in other parts of the world, earthquakes can leave entire cities paralyzed and many homes destroyed. In the next few sections, we will take a closer look at earthquake coverage, how much it roughly costs to purchase, and whether it is worth purchasing for your home or condo.
What is Earthquake Insurance?
In its simplest description, Earthquake insurance covers the loss or damage caused to a property as well as its contents, because of the shaking of the earth. In most policies, if the shaking of the earth results in a fire, only the resulting loss or damage from the fire would be covered under an ordinary home insurance policy. However, if your home is damaged because of the earth-shaking, not a fire, your standard home insurance policy would not cover the resulting damage unless you have purchased the earthquake coverage add-on.
It is true that earthquakes do not occur as frequently as other natural disasters. While that may be true, earthquakes can cause disastrous damage to homes, possessions, and other buildings. They can happen at any time and can leave people completely stranded, without any of their possessions or even a place to live. Having earthquake insurance provides you with peace of mind knowing that should a major quake hit the Lower Mainland, your home and your belongings are covered.
Cost of Earthquake Insurance
Over the years, the cost of earthquake coverage has increased substantially. Depending on the area of BC that you live in, the additional premium directly attributable to the earthquake can make up as much as 25-35% of your overall premium. Multiply that amount by the number of years you own your home or condo for, and you are paying a significant amount of money for something that may never happen in your lifetime. If the earthquake coverage component costs $300 a year to have and one lives in their home or condo for 40 years, that’s $12,000.
Purchasing any type of insurance requires all of us to look at the costs and benefits. While this cost may seem like a lot – especially at the moment with costs of living rising – if we didn’t have earthquake coverage and an earthquake hit, that could mean a total loss of a home. If we were to experience a disastrous earthquake in our lifetime, that $12,000 spent would be worth every penny and provide you with financial certainty during the most challenging time of your life. And, given that we do live in a part of the world that is prone to earthquakes—and experts telling us we’re overdue for ‘a big one’, it better to be safe than sorry and make an Earthquake Coverage part of your Residential Insurance policy.
Also as part of many earthquake policies, in certain circumstances, homeowners who are unable to return to their homes as a result of insurable damage may be entitled to additional living expenses. Earthquake coverage is also available for your place of business. In the event earthquake damage impedes your business operation, business interruption insurance can also be purchased.
At Leaders Insurance, our brokers are here to assist you with finding ways to manage your home insurance and find the best policy and rates for your needs. This includes investigating the costs and coverage for earthquake insurance. We look forward to continuing to support you in 2023 with all of your insurance goals. Contact Us today.
Let’s make 2020 your best year ever!
Will Strata Deductibles Rise Again in 2023?
Will Strata Deductibles Rise Again in 2023?
For that last couple of years or so now, a hot button topic for many BC residents remains the rise in strata insurance fees.In previous years, condos and townhome owners have especially bared witnessed to their fees steadily increasing, with home insurance costs overall continuing to creep up.
The reality is that there are now over 30,000 strata corporations spread across BC, with nearly 1.5 million residents in the Metro Vancouver area alone.To shed some more light on what 2023 will bring, let’s take a closer look at some of the surrounding issues impacting strata unit owners in BC.
Strata Construction Materials
According to Canadian Underwriter, the type of materials that are used in strata builds have played a major role in the higher costs of insurance premiums.
As such, wood frames versus concrete are typically used in BC construction, and the high price of lumber has driven prices upwards. So much so that, Opta Information Intelligence pointed to a 400% increase in the cost of lumber between 2019 and mid-2021.
Weather-Related Risks
Ranging from fire to water damage, strata deductibles have been on the rise due to harmful weather conditions across the region, which includes significant fire and water damages.
Earthquakes across BC have also let to expensive re-builds, lending themselves to higher premiums.
Building and Repairs
With construction materials more in demand and costing more on the whole, rebuilding and repair costs could still bring higher rates, in terms of the amount of insurance coverage required to offset the costs the BC strata markets will face.
Higher Claims
The reality is that with higher deductibles coming out of condo corporation budgets, premiums have had to also increase. As a result, many strata groups have acknowledged the need to shift towards more prevention methods. To help offset these both present a greater challenges when it comes to increased damage and in turn, higher claims.
Strata Outlook
Thankfully, there are signs that do have market experts pointing towards more stable strata fees in the new year.
With positive steps being taken toward preventative measures, this may also point towards a more favourable home insurance market, including the outlook for strata corps. in 2023.
Some Promising Solutions
In a major attempt to improve strata insurance fees, the Insurance Brokers Association of BC (IBABC) has made some recommendations that they feel will help to clarify any ‘grey’ areas when it comes to differentiating between the ‘insurance duties’ of unit owners and insurance corporation.
For starters, a $50 000 cap on loss assessment has been proposed, since as it stands, unit owners can be left with giant insurance bills that pose a major risk to their financial stability.
This is ultimately, one way that strata corps. feel they can lessen insurance deductibles moving forward.
The IBABC also suggests that all parties would benefit from a more comprehensive ‘standard unit’ definition within the BC Strata Property Act. The goal being that this would ensure units are being kept up to code, in terms of construction criteria, i.e. the walls, subfloor, electrical, plumbing, ceilings, etc.
Again, the idea being that this will help to distinguish between what is the responsibility of the owner and what is the responsibility the corporation when it comes to insurance payments.
IBABC goes on to add that these steps could mean that ‘millions of strata owners’ would be protected from the risk of losing their homes, because they simply can’t afford the rebuild or repair costs.
With these refinements on the horizon, it would seem there is hope for lower strata deductibles in the future – not a rise in high rises!
At Leaders Insurance, our brokers are here to assist you with finding ways to mange you home insurance. We look forward to continuing to support you in 2023 with all of your insurance goals.
Why Insurance Rates Go Up
Why Insurance Rates are Rising
As reported by Canadian Underwriter at the beginning of 2022, home insurance policyholders were expecting an average 5% rate increase in 2022.The average cost for home insurance in Ontario in 2021 was $1,342, per RatesDotCa. A 5% increase would translate into a rise of $67 per year, making the average cost $1,409 annually.
The main reasons for the 2022 increases come down to several things, including renovations, rebuilds, and climate change. Although RatesDotCa and the Insurance Bureau of Canada issue a caveat that home insurance rates are extremely difficult to predict. So, what is causing these 3 drivers to create a rise in home insurance?
Climate Change
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.”
Renovations
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.
Rebuilds
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.
How to Save Money
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.
We are Living in High Cost Times. What You Can do to Reduce Insurance Costs
We are Living in High Cost Times. What You Can do to Reduce Insurance Costs
Just a Sign of the Times . . .When Harry Styles sings ‘Just stop your crying, it’s a sign of the times’ - sure it might be catchy, but the unwanted sign of the times we’re referring to here is the soaring cost of living across Canada - so actually yes, some crying is to be expected.
While living in Canada certainly comes with its benefits, the reality is, it is still an expensive place to hang your hat.
That’s why finding ways of both sustaining our income, has become a top priority for many BC residents.
It likely also comes as no surprise that two of the main contributors to the high cost of living is homeownership and maintaining and operating our vehicles. From climbing gas prices to high-reaching home heating, cooling and renovation costs, not to mention the many more daily financial challenges – we certainly have been feeling these burdens much more as of late.
Turning our focus back on the bright side for a moment, Canadians are also highly resourceful people. We continue to look for realistic avenues where we can reduce our expenses.
That said, one main way you can do this is by exploring ways to save money on your insurance.
With insurance being pretty much a given, let’s visit some additional ways you can save on your insurance – as well as how your insurance broker can help you along the way.
How to Save on Your InsuranceHome Insurance
With home insurance typically being one of the most expensive areas of coverage you will face, you also have the potential to reduce your costs.
A lot can change in a year, so it is best to evaluate your insurance on a yearly basis to ensure you have the right amount of coverage for your needs.
This is a great opportunity to lower your fees by removing areas of coverage that simply might no longer be needed. In many cases, there is no point in paying more for your policy by over-insuring your home and personal belongings.
By taking an active approach, you can review your policies regularly with the help of your broker. Not only can they go through the finer details of your policy with you, they can also shop around and find the best coverage options for your specific needs.
Vehicle Insurance
When it comes to reducing your car insurance, BC companies don’t compete for insurance, so auto policy rates are typically the same across various brokers. Fortunately, you can still save some money by doing everything you can to avoid accidents and by practicing safe driving as this can lower the amount of claims you are likely to have to make.
If, for example, you are someone who is unlikely to have to make claims very often, one additional step you can take to reduce your insurance costs is to increase the amount of your upfront deductible payment.
It is again a good idea to discuss your options with your insurance broker, as they can recommended a plan that is both realistic and unique to your individual driving situation.
How to Save on Both Home and Vehicle Insurance
While some similar steps can be taken to reduce your insurance across the board, another beneficial method of lowering your car insurance costs, is to look for discounts that you may be eligible for. Some of these include: low-kilo-meter, safe technology, senior savings, and experienced driving discounts.
In terms of both home and car insurance policies, you may also want to consider bundling both of them together – saving you some additional money in the process.
By reviewing your insurance annually for all insurance areas, your broker will help to ensure you have the most suitable insurance coverage that will adequately address many of top financial concerns.
The Bottom Line is…
The most important take away here is that, when it comes to the dark cloud that is the current costs of living – you do have options to save money at a time where it really matters. You just have to know where to look, and in this case, who to ask for help.
Leaders Insurance ‘puts the who’, in who you can turn to for assistance. And when it comes to the current uniqueness of the times we are living in, our insurance brokers can point you in the right direction by finding unique solutions to your individual insurance needs.
ICBC is Making Changes to Vehicle and Sales Taxes
ICBC is Making Changes to Vehicle and Sales Taxes
Are you in the market for a new vehicle? Well - new used vehicle that is. With a backlog of issues affecting production lines for new vehicles, Canadians have been turning to the used car market more and more.In BC, however there are new implications occurring this fall that will impact the price you are likely to pay for your used vehicle. As per the article by Vancouver Island City News, BC drivers can expect to be charged more sales tax on the their purchase.
With typically high costs already associated with owning and operating a vehicle, BC car owners, should anticipate having to pay a bit more for their vehicles.
Here is the breakdown of these changes and how it is likely to impact your finances.
As of October 1 of this year, the BC government has imposed changes to the sales tax on private sales of used vehicles. Moving forwards, these rates will be calculates based on the wholesale or Black Book value of the vehicle, regardless of the price the seller has listed it at.
This means, if the set asking price is $15,000, however the vehicle’s Black Book value is $17,000, you will have to pay PST rates on the Black Book price, not the seller’s price.
When it comes to buying a used car at the wholesale value, there is another important issue that BC residents will need to be aware of. If you are paying the seller $15,000 for the vehicle, and you already know that the taxes will be based on the wholesale value, not the private sale price, you will also want to make sure that the vehicle is in good condition and is actually worth buying at that amount.
It isn’t uncommon for previously owned cars can be sold with damage that isn’t always made known to the buyer. Even if you know upfront about it’s condition, this means you may still be having to pay extra for additional repairs on top of everything else.
ICBC maintains that these changes have been set with the intention of saving money, while protecting the market against cases of fraud. That being said, this increase will have implications for car buyers, especially those with lower incomes, those perhaps, who are trying to shop around for an affordable deal on a used vehicle.
Additionally, the BC government has stated that it will be a rarity that a used car will go for lower than the wholesale price. That said, if this does happen, buyers are entitled to pay for a mechanic to appraise the actual value of the vehicle through an assessment of its current condition, and can then apply for a reduced sales tax payment.
However, this is yet another payment that you can expect to pay out of your own pocket. This again reinforces the importance of paying close attention to all of the costs that will associated with the purchase of your used vehicle, so that there aren’t any added surprised when it comes to the amount you will need to pay overall.
Insurance rates are also always a hot topic, as BC residents are already paying an awful lot to drive their cars.
The reality is that many BC residents rely significantly on the use of a vehicle for personal and professional use, and these increased sales tax rules will affect their livelihood – and their daily commute.
One bright spot in these days of rising car prices – new and used, is having the support of your insurance broker.
Your Leaders Insurance broker can help you navigate these changes and assist you in finding the most affordable and most appropriate car insurance for your personal and business needs.
Especially these days, when we can all benefit from saving a bit of extra money – your broker can be an excellent resource in helping you achieve this goal.