Thousands filed insurance claims after this summer’s storms pummeled Alberta with hailstones measuring up to six centimeters in diameter, and this isn’t the first extreme weather we have seen in the last year. Weather-related insurance claims from over fifty severe weather events since November 2011 total nearly $500 million. Chances are good that we have all known someone who has had their property damaged by one of the severe storms of the last few years.
Home Insurance Premiums on the Rise
Because of the increase in severe storms, Alberta home insurance companies have been paying out substantially more for claims than they collected in premiums for approximately five years now. Lane’s Insurance CEO, Chad Mullen, believes this is due to the combined severity and frequency of storms, especially hailstorms. Mullen says, “These storms seem to be getting stronger as time progresses. If insurance companies continue to pay out more in claims than they collected in premium eventually they will be forced to raise their rates to a point that polices would not be affordable to the consumer or they would be forced out of business. They are taking corrective action now to minimize and spread the premium increases over a period of time.”
Storms Affect Us All
Even if your property hasn’t been damaged in any of the recent years’ storms, we will all see an increase. “The basic principal of insurance is the losses of the few are shared by the many polices holders,” says Mullen. To determine the cost of Alberta home insurance policies, underwriters calculate risk based on the losses of a few spread over the larger pool of policyholders. As a result, as the cost of claims increase, the cost of damages must also be spread out across all policyholders. Rates don’t just go up without any reason. The risks to your home have increased. Your homeowners insurance is protection your family needs.
Managing Your Costs
While it is unlikely you will be able to avoid higher premiums, there are a few things that we can all do to balance out rate increases. Chad Mullen advises policyholders to “raise your deductible, install a monitored alarm. Be sure to let your broker know if you have made improvements to your home. And, of course, always combine your home owners and auto insurance policies with the same provider, so you can maximize your discounts.”
Use a Broker to get the Best Rates
Some people have asked if they can get a better rate by going with a different insurance provider. As we all know, insurance company’s rates vary somewhat, which is why Chad Mullen recommends “it is always advisable to use an insurance broker like Lane’s Insurance who has access to multiple insurance companies so you get the best policy at a competitive premium.”
While no one likes the idea of paying higher Alberta home insurance rates, the benefit to you as a policyholder comes from knowing you are with an insurer who has the ability to pay and settle your claim, should you ever have one. Mullen points out, “The piece of mind in knowing your home is covered has come at an increasing price, but the value you place on your home and assets is absolutely worth protecting.”
