What to expect when it comes to the price of home insurance in 2015

April 27th, 2015

Spring usually signals the start of the real estate high season. According to Time magazine, the best time to sell a house is in spring. After the long winter months, buyers with a tax refund cheque in the bank may be more motivated to pay full price (or close to it.) In Calgary, resale-housing prices are up despite the highest inventory levels the city has seen in many years.  In Airdrie, homes are still averaging $397,867, in Cochrane they’re at $445, 033 and in Fort McMurray the average home costs a staggering $707, 216. Despite being known for the price to buy a home, the drop in price of oil and a slight shift in the cost to purchase a home, have many wondering about home insurance.

Availability, affordability and sustainability are all areas of concern for insurance carriers in Canada. The last few years in Alberta have seen a huge increase in natural disasters costing millions in recovery. Now, in order for home insurance to be available and sustainable from a company perspective, insurance companies are raising premiums. This is directly related to the increasing costs of catastrophes across the country. They’ve also begun limiting coverages with regard to water, wind and hail to ensure that they remain sustainable in the marketplace.

Here are some examples of disasters influencing the markets:

  • 2013 Alberta floods: $6 billion+ ($1.7 billion insured)
  • 2012 Calgary hail, wind storms: $552 million
  • 2011 Slave Lake fire: $700 million
  • 2010 Calgary hail storm: $400 million
  • 2005 Alberta floods: $400 million
  • 1998 Que.-Ont.-N. B. ice storm: $5.4 billion
  • 1997 Man. flood: $3.5 billion

If you’re like most Canadians, your insurance company probably raised your premiums and you’re shopping around for the best coverage, for the best price. Here are examples of what you can expect this year for insurance:

• Average increase 20% on homes with no claims

• Home with multiple claims increase in premiums up to 55% – 60%

Keep in mind that it’s not just one bad year that is affecting the change in premiums or coverage’s.

The changes in offerings for personal lines are similar to commercial insurance, in that wordings are being changed, deductibles are being raised, they’re limiting coverages and in some cases no coverage is being offered depending on where the home and/or risk is located regardless of mitigation that the insured’s have prepared. (Ex. Installing sump pumps and back water valves.)

A quick Google search can be misleading, so to make sure you’re getting the best coverage, for the best price, speak to your insurance broker and discuss your options.

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