Understanding Rising Insurance Rates

Catastrophic fires, unprecedented flooding, and wild windstorms have captured headlines across the globe.

As more and more home and business owners face costly weather events, insurance companies are seeing more claims being filed and paid. According to the Insurance Bureau of Canada, in 2018, severe weather led to $1.9 billion in insured losses. As insurance companies look to provide their clients with the coverage they need and deserve, an increase in rates has been necessary to remain viable.

Climate change has caused damage in every corner of the world, with Canada being no exception. Changing weather patterns have led to an increase in flooding, and water damage has overtaken fire to become the top home insurance cost in recent years.

In winter months, storms and extreme shifts in temperature can lead to frozen pipes and ice dams. Ice dams are created when the snow on your roof melts and accumulates at the roof’s edge, where the temperature is cooler. The ice builds up and blocks water from draining, causing water to seep under the roof, into your attic and the inside your walls.

While we can’t always predict extreme storms and the potential damage they will cause, we can help you prevent flooding caused by these issues. Some easy tips for winter include:

  • Turn off your outside tap from the inside and ensure the exterior tap is open
  • Use caulking to seal holes and cracks in outer walls and the foundation near water pipes
  • Fit exposed pipes with insulation sleeves
  • Keep your attic well ventilated to reduce the chance of ice melting and refreezing
  • Ensure your attic floor is well insulated to minimize the amount of heat escaping your home
  • If an ice dam forms, call a roofer to have it safely removed

Beyond home and property insurance, you may have noticed that your auto insurance rates have increased, even when you have no claims. There are a couple of potential reasons for this.

One is the increasing amount of technology built into our vehicles. While capabilities such as adaptive cruise control, collision alerts, and park assist can help keep you and your passengers safe, they also use sophisticated computer systems and sensors that cost more to repair. In fact, according to Consumer Reports, 2017, the cost of an average car repair was $70 in 2007, but that had skyrocketed to $520 in 2014.

Auto insurance fraud is also on the rise. Staged accidents are causing rates to increase across the country. In Ontario alone, the Insurance Bureau of Canada reports that the cost of fraud is an estimated $1.6 billion per year–that works out to $236 per driver.

Other reasons for rising costs include more cases of distracted driving, more expensive medical services, built-in windshield technology, more expensive front and rear sensors, and geographical location and trends.

How you can save

When it comes to insurance, most people want a policy that doesn’t cut corners, but still fits their budget. Using an insurance broker means we do the legwork for you and advise on policies that fall within your price range. However, there are a few things you can consider to help keep costs down:

  • Raise your deductible–trading a portion of the monthly cost of your policy for a larger share of the cost in the event of an accident
  • Combine your home and auto insurance
  • Take steps to make your home disaster-resistant
  • Install security systems and other safety features to your home and vehicles
  • Purchase snow tires and use them during the winter months
  • Ask about other discounts that may be available, based on age, location, customer loyalty, or credit rating

Although some insurance rates are changing in response to climate concerns, computerized cars, or even rates of fraud, we can’t predict when and how these rates could change. However, our job as your broker is to find you the coverage you need at a price that is fair by shopping around for you, comparing quotes, and analyzing options.

As a member of the Greater Kitchener Waterloo Chamber of Commerce, you also have access to exclusive savings on your home and car insurance with Cowan.

Contact us at cowangroup.ca/chamber to get a quote today.