Big changes may be in store for Alberta Home Insurance policy holders. Many are likely to see an increase in their premiums and for some, the increase could be significant. The potentially increasing house insurance rates are due to recent hail storms in Alberta. By educating our clients on the subject, we hope to prepare them for these potential increases and make sure they’re aware of the ways to minimize increases in premiums for their Alberta Home Insurance policies.
The Cost of Natural Disasters Has Dramatically Increased Over Time
1996 – Flooding in Saguenay, Quebec equalled $1 billion in damages
1984 – Drought on the Prairies cause $1 billion in damages
1988 – Drought on the Prairies caused $1.8 billion in damages
1979 – Drought on the Prairies cost $2.5 billion in damages
1998 – Ice storms hit Ontario and Quebec causing $4.2 billion in damages
2001 – Droughts in British Columbia, the Prairies, Ontario, Quebec, and Nova Scotia cost $5 billion
Alberta Weather Affects All Economies, Including the Insurance Industry
Oil production – In 2011, wildfires in northern Alberta forced the closure of some energy and transport companies. Slave Lake was evacuated as hundreds of homes and other buildings were destroyed by fire. A section of the Plains All American pipeline from Slave Lake was closed, leaving no way for oil to be transported out of the area. Penn West Petroleum of Calgary suspended drilling and shut down the production of at least 25,000 barrels of oil per day. As a result of wildfires near the Horizon Oil Sands site, Canadian Natural Resources Ltd. had to move 1,300 workers out of their base camps.
Farming – Flash flooding caused by heavy rain turning meandering creeks into rivers, dead trees scattered across the land or stuck in mud flats, crushed buildings with tractors remaining inside wedged in sediment, grain silos collapsing, cows unable to graze because the soaked ground can’t support their weight – these are becoming familiar sites in Canadian farmlands.
When a House Insurance Rate Increase Occurs
A frequently asked question is: I didn’t have a loss, why should my rates go up?
When insurance underwriters calculate risk and determine the cost of Alberta Home Insurance policies, rates are calculated based on losses of a few, spread amongst many policy holders. As the amount of insurance claims increases, the cost of damages must be spread across policy holders, even those that haven’t filed a claim.
Four Ways to Minimize Increases in Premiums for Your Alberta Home Insurance Policy
Here are four actions our clients can take to minimize rate increases:
- Change to a higher deductible
- Install an alarm in your home
- Make sure your broker is aware of any updates made to your home
- Combine your Alberta Home Insurance and Auto Insurance policies with Lanes
While the potential for increased rates certainly exists, the risks to your home are also increasing. Adequate coverage to protect the investment you’ve made in your home has never been more important.
Please contact your broker today if you have any questions about changing the amount of your deductible, how an alarm can lower your house insurance premiums, what upgrades will qualify you for a lower rate, or how you can combine your Alberta Home Insurance and Auto Insurance policies to save money on your premiums.
