Posted 1.23.14 @ 8:25
Massive storms have caused monthly payments to rise 15% to 20% in some areas, and with insurers hedging their bets, these jumps in premiums are here to stay. Even homeowners in Ontario will need to brace for permanent jumps in their property insurance - but are you ready? How much can you expect your premiums to jump over the next few years? Let’s find out!
The Ripple Effect
As more and more insurance companies are forced to pay out major claims (for hazardous winter weather or otherwise), the money has to come from somewhere - and unfortunately, that has to come from homeowners.
Intact Financial Corp, one of the largest insurers in Canada, said recently during an interview that they had had to increase premiums over the last few months by as much as 20% for some homeowners, and that they expected this trend to continue. As claims related to the weather and catastrophic losses (entire homes and cars, in some cases!), the money has to come from somewhere.
$3b Paid Out This Year Alone
Leaps and bounds ahead of other years in the past - and it’s estimated that 70% of those catastrophic losses and weather-related claims came from just the last few months alone. There are no official figures out just yet, but either way, that’s a lot of money flowing out of the insurance companies.
Some say this is what’s encouraged many insurers to bring back peril-pricing. If you happen to live in Ontario (like we do!), in an area where severe weather is expected to continue if not intensify, your insurer will look at your price risks. They’ll be able to predict certain perils (like really bad winter storms), but they can also figure out if you’re in a high vandalism or theft area.
How Much More Will You Pay?
It’s expected that over the next five years premiums (over the period, not annually) could rise as much as 40-50% - but the risk for insurers and you will rise as well. Lapse in your property insurance coverage and you could end up with a catastrophic loss and no coverage.
It’s a changing world, and no one can say for sure that this severe weather will continue at a rate that necessitates a 50% jump in home premiums. It is important to note though that most of us are going to see a jump in our monthly fees for some time to come, and there’s not much any of us can do about it. It never hurts to hedge your bets though, finding out where you can head off the small stuff that can cost you big later.
We can’t get your insurance premiums down, but we can help you find a beautiful home that you’ll love for years to come. If you’ve been thinking about buying a beautiful luxury home on the shore or in the clouds give us a call today and see what we can do for you!