Home Insurance Rates Expected to Rise
According to the Insurance Bureau of Canada, the amount of insured damage resulting from extreme weather in Canada grew from less than $200 million in 2006 to $1.2 billion in 2012.
''There are more and more storms happening, and we're seeing extreme weather events that happened once every 40 years... that can now be expected to happen once every six years,'' said Pete Karageorgos, manager of consumer and industry relations at the Insurance Bureau of Canada.
''Trends for the last few years have been that we're seeing storms occur with greater regularity so the amount of claims that have been presented have been averaging about a billion dollars a year over the last three years or so.''
In the past year alone, the combination of massive floods in Alberta in June 2013, and a one-day torrential rainfall in Toronto in July, brought the overall amount of insured property damages across Canada to $3 billion. And this figure doesn't even include the claims for damages sustained in the December ice storms across Ontario, Quebec and the Atlantic provinces.
Intact Financial Corp. (TSX:IFC), one of Canada's largest property and casualty insurers, raised premiums by 15 to 20 per cent during the past few months as catastrophic losses and weather-related claims have risen dramatically.
We are likely to see other insurance companies increasing their rates, too. So what can you do about controlling the amount that you pay for homeowners insurance? Shop around for lower rates!
Insurance companies all have different underwriting rules and charge different rates. Insurance companies’ rates are partly based on the amount of money that they have paid out in claims. And, some insurance companies have paid out more than others, so their rates are likely to go higher. The trick for insurance shoppers is to find the insurance company with the lowest rate.
Tips on countering the upcoming increase in home insurance rates
- Shop your rate. Websites like InsuranceHotline.com make it fast and easy tocompare home insurance ratesfrom over 30 companies. You can get up to 10 quotes in about 10 minutes.
- Make sure that you are comparing "apples to apples". Not all homeowner insurance policies are the same. Check with your insurance professional to make sure that you are not sacrificing coverage for a lower premium
- Look for discounts. Many insurance companies will give you a discount if you have your car insurance with them, too. Do you have a monitored alarm system? Let your insurance professional know, and you may be eligible for a discount. Always ask what other discounts are available.
- Review your deductible amount. You may save money by increasing your deductible amount. However, before you do, make sure that you are comfortable with the new deductible in the event that you have to make a claim and have to pay the deductible amount.
You can also save even more money on your home insurance policy by avoiding these costly home insurance mistakes.