The top reasons why home insurance premiums increase
Even if you’re a model customer with no claims, there are many factors that could result in higher home insurance premiums.
- Extreme weather events and catastrophes are more frequent and severe. As forest fires, floods, storms, and other weather events become more frequent and severe, they cause more extensive damage and result in more frequent and costly claims.
- Municipal infrastructure is getting older. Outdated municipal infrastructure, a higher demand for water, and the increased frequency of severe weather make sewer backups more frequent, resulting in more damage-related claims.
- Neighbourhood trends might put you at greater risk. When neighbourhoods grow, demographics and risks change. For example, if there is a new commercial development near your home, or a new subdivision emerges, this might alter municipal infrastructure. These are factors insurers look at when assessing risk.
- Inflation is making everything more expensive. As inflation leads to higher prices for all goods and services, it also affects the cost of things like emergency services, building materials, and labour. That means paying for claims is more expensive, too.
- Supply chain disruptions and labour shortages are leading to higher costs. The harder it is to find labour and materials, the more expensive it is to complete home repairs after a damage-related claim.
- Some new features are eco-friendly, but not budget-friendly. Eco-friendly features like solar panels, energy efficient windows and doors, and high-efficiency appliances are great choices for our environment. But it’s important to realize that if these types of items are damaged, they could require more expensive repairs.
- Home prices are increasing. Rising home values and more homes with high-end entertainment features (like pools and hot tubs) drive up replacement costs and liability claims.
- Finished basements need more coverage. Since they’re made with higher-priced building materials, finished basements cost more to repair if there’s a sewer backup or other damage.
How to save on home insurance
Learn from an industry expert
No matter how squeaky clean your record may be, car and home insurance rate increases affect everyone. Get an inside look at why this is happening and how you can prepare from Definity’s Sebastien Vachon, Regional Vice President of Quebec.
Curious why car insurance rates have also increased?
FAQs
- Ask your broker about home insurance discounts that could help lower your premium.
- Go for a higher deductible, since choosing to pay a higher deductible in the event of a claim is a sure-fire way to reduce the premiums you pay. Just be sure you choose a deductible amount you’re comfortable paying if you need to make a claim down the road.
- If you’re purchasing a home, follow these tips to help lower your insurance premium.
- If you’re updating your home, consider renovations that could save you money in the long run.
If you have complex insurance needs and you’ve added extra coverages to your policy or increased your limits, the Above & Beyond home insurance bundle could help you get better value for your money. Available exclusively to Economical home and condo insurance customers, the Above & Beyond bundle includes:
- First claim forgiveness
- Replacement cost coverage, even if you decide not to repair or replace damaged or destroyed property
- Higher Personal Belongings Special Limits
- Higher limits for Condo Special Coverage
- Waived deductibles on claims over $10,000
Note: there are some conditions on these coverages — be sure to review your policy wordings for full details.
With rates increasing industry-wide, Economical home and car insurance rates align with industry standards, making us a competitive choice. Most importantly, we back up our product offerings with dedicated claims service, meaning that we’ll always be there for you — at renewal, during a claim, and in between.
Economical has a proven track record of putting customers first. With a team of more than 600 claims specialists across Canada, a 24-hour emergency service line, and a hassle-free service program that guarantees the quality of your repairs, you can be confident that you’ll get the care and service you deserve.