The topic that seems to be on everyone’s mind right now is home insurance, and more specifically, their home insurance premiums. People all over the province have been receiving their insurance renewals and are often times finding that their premiums have jumped significantly from the previous year. So, what’s going on?
Over the last several years, Canada has experienced the most severe catastrophic events in its history. According to the IBC ( Insurance Bureau of Canada), not only have the frequency of natural disasters increased, so has the severity of this events.
In Alberta alone, we have seen first hand, some pretty serious natural disasters:
Southern Alberta floods and heavy rains ($1.7 billion)
Edmonton heavy rains, thunderstorms and wind ($106 million)
Calgary area flooding, hail and windstorms ($552 million)
Southern Alberta wind and thunderstorms ($74 million)
Slave Lake fire ($750 million)
Southern Alberta Tornado ($200 million)
Calgary windstorm ($225 million)
Now you may be saying to yourself ” Well, my house didn’t get flooded or hailed on, but my premium still went up!” This is actually a very common sentiment that we have heard over the past year or so in deal with home insurance. However, we need to remember the whole purpose of insurance to begin with. Wikipedia defines insurance as “the equitable transfer of the risk of a loss, from one entity to another in exchange for payment” I like to think of it as: “Insurance is the transfer of financial risk of the few, to the financial strength of the many” Because of the way the insurance system works, we all must pay into “the pot” and share the cost of these insurable claims. While sometimes it may feel like we keep paying, and paying and paying but never making a claim, statistically speaking, there will come a time when we too will need to call on that “financial strength of the many” and make an insurance claim.
I don’t think it takes a list of statistics for us to see that there has been a significant increase in weather related and other disasters across the country and especially here at home in Alberta. Many of us, have had first hand experience with either hail, wind or water damage in our own homes or personally know someone who has. Obviously, because of the increase in natural disasters, insurance companies have had to respond to a huge increase in claims, and claims payouts. In order for the insurance companies to stay profitable, and therefore sustain their business and continue to provide insurance coverages to us the consumer, they have had to make changes. These changes include increasing deductibles, changing coverage limits and of course, raising premiums. These changes can be a very confusing thing to the untrained eye, and should be discussed with an insurance broker.
Now, more than ever, it is very important to trust your financial security and insurance needs to an independent insurance broker. If you have questions or concerns about your home insurance policy, or if you are unsure about how it may have changed, please contact our office at (403) 223-4434 and ask to speak to a personal lines insurance broker, or visit our website at www.saunders-insurance.com
***Source of insurance statistics: Insurance Bureau of Canada, Intact Insurance: http://www.insuranceisevolving.com/en/weather-events-alberta.html***