Due to the pandemic, inflation and supply chain issues, many things have increased in price and now it looks like home insurance will as well.
“We do anticipate seeing larger than normal increases in 2022," Henry Lof, with the insurance comparison website RatesDotCa, told CTV News Toronto Friday.
Lof said the industry is expecting that home insurance premiums will rise 5 per cent in 2022 and some companies may increase premiums 10 per cent or more.
According to the website, the average cost for home insurance last year in Ontario was $1,342 annually. It expects a jump of $67 to $1,409, but Lof said some companies may implement larger increases.
One of the primary reasons for the hikes is extreme weather issues due to climate change. The tornado that ripped through Barrie, Ontario in July led to insurance losses of $100 million.
The flooding in British Columbia in November was the most severe weather event in the province's history, leading to losses of more than $450 million.
"We do know across Canada in 2021, there were about 2 billion dollars of severe weather claims that were incurred from coast to coast,” Rob de Pruis, with the Insurance Bureau of Canada (IBC), told CTV News Toronto.
It may br frustrating for clients to see their rates go up even if they haven’t had a claim, but the industry says that when there are huge losses they will push up premiums for all customers.
“The underpinning concept of insurance is spreading the losses of the few among the many," Lof said.
IBC said that inflation, supply chain issues and the rising costs to rebuild a home are also putting pressure on premiums.
Many homeowners have also invested in their homes during the pandemic which makes them worth more.
RatesDotCa said rates are rising for multiple reasons — renovations have increased home values, the cost of home replacement has gone up, there has been an increase in the price of building materials and climate change and severe weather is leading to large insurance losses.
Clients are advised to ask if they're eligible for any discounts and to shop around to see if they can find a better deal.
“Across Canada, there are 200 insurance companies selling home, auto and business insurance, so there is quite a bit of competition,” de Pruis said.
Homeowners are also advised to contact their insurer to see if a security system, a good credit rating or bundling home and auto policies can save them money.
One of the most common insurance claims is flooding, so you want to make sure you have the proper flood coverage because, when it comes to water damage, there can be big differences between policies.
Customers are warned to not shop by price alone and to compare policies carefully.
Ontario home insurance rates to rise 5 per cent or more in 2022 - CTV News Toronto
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