Home insurance policyholders in Ontario can expect an average of 5% or more rate increase in 2022, as reported on CTV News Toronto – January 14, 2022.
The primary reasons cited:
- The primary reasons cited for the 2022 increase in rates comes down an increase in extreme weather catastrophes linked to climate change, renovations and rebuilds.
- The July ‘21 tornado that ripped through Barrie, Ontario resulted in insurance losses of $100 million.
- The severe flooding in British Columbia in Nov ‘21 resulting in losses of more than $450 million was the worst weather event in the province’s history.
The pandemic has forced people to stay at home more than ever before and this has resulted in them spending more on renovations. Statistics Canada, posts that Canadians had applied for 212,523 home improvements and residential alteration permits in 2021 alone, which was an increase of 12% from the previous year. Home improvements and renovations increase the cost of rebuilding, and this in turn drives premiums up.
According to a report from RatesDotCa the average cost for home insurance in Ontario in 2021 was $1,342, and a 5% increase would convert into a rise of $67 per year, making the average cost $1,409 annually. But rates will differ from company to company.
Home owners find it annoying when they see rates go up even if they haven’t made a claim, but insurance sources say that when there are huge losses they will push up premiums for all customers to spread the losses of a few among many.
Some factors that influence the premiums of home insurance are the age of your home, its floor area, its replacement cost (directly dependent on the inflation costs of materials), the age of plumbing and electrical system in the house, condition and type of roof, finished or unfinished basements, distance from fire safeguards (fire station or fire hydrant), your postal code, fluctuations in crime rates, mortgage and your credit and insurance claims history.
Standard home insurance does not cover some perils, so home owners are advised to take optional add-on coverage depending on the possibility of some natural disasters occurring in the area they live in. These include the damage caused by floodwater or sewage backup, melting of ice and snow, tornados, landslides, avalanches, earthquakes and fuel leaks.
Some Measures for Home Owners to Lower Their Premiums
- Shop around and obtain quotes from different companies. Take into consideration coverage, service discounts and promotions.
- Insurance companies often offer discounts when you “bundle” your home and auto insurance.
- Opt for higher deductibles for claims relating to your home and its contents as this lowers your premium.
- Home insurance should not be confused with what you paid for the house and the cost of rebuilding it. The cost you paid for the house includes the land value it sits on which cannot be stolen, or effected too much by natural disasters. Consider only the cost of rebuilding the house as it will lower your premium.
- Take measures to make your home more disaster resistant. Install a burglar or fire alarm system linked to a monitoring station. Provide more sensor lighting outside the house. Replace or reinforce old doors, windows and roofs to make them more resistant to natural disasters.
- Modernize the plumbing, heating and electrical systems in your house to reduce the risk of fire and water damage.
- Notify your insurance company of any major home renovations or improvements. This will increase your premium but it will avoid any compromise on your coverage.
- Ask your insurance company if they need to have someone regularly checking your home.
At AiA Insurance, we are dedicated to providing more than just reliable protection for your home. Our agents are experts on Home Insurance and can provide you with a coverage tailored to your needs and provide you with the best quote. We value your safety and that of your home.
