Residence insurance costs are falling, however no grace interval for apartment homeowners – Canadian Underwriters
Homeowner premiums were mixed in the first quarter of 2021, with condominium insurance continuing to rise but home insurance rates trending lower, according to a new report from LowestRates.ca released Tuesday.
Year-over-year, home insurance (excluding condominium) premiums on the rate comparison page are down 12% in British Columbia, 6% in Alberta and 1% in Ontario, according to the Home Insurance Price Index report for the first quarter of 2021 That said, rising material costs such as wood, wood shortages, demand for renovations, and more frequent and severe environmental disasters could drive rates higher, LowestRates.ca warned.
On the condo side, there is no grace period for condo owners faced with rising rates due to aging infrastructure, rising deductibles and a lack of competition in the marketplace, ”reads the report, which tracks hundreds of thousands of insurance rate offers every year, according to LowestRates. ca (but does not take inflation into account).
In British Columbia, condo prices listed on the comparison page rose a whopping 27% in the first quarter of 2021 compared to the same period last year. In Alberta and Ontario the increases were 16% and 9%, respectively.
"We're seeing insurance rates skyrocket nearly 30% year-over-year for some condominium owners, but are falling by double digits for homeowners like we're seeing in British Columbia," said Justin Thouin, Co-Founder and CEO of LowestRates. approx. "There are competing conditions – regulatory changes and competition are improving, but the environmental impact is a real threat to tariff premiums."
The BC government announced a series of regulatory changes last year aimed at bringing more insurance providers (and therefore more competition) back into the province's shift market. "But the insurance industry doesn't move fast and typically operates on 12 to 18 month cycles," said LowestRates.ca. "In late 2020, the BC Financial Services Authority forecast in a report that 'it will take time to get the market back to a healthy state, possibly years' front."
The "good" news is that home insurance rates have fallen and the greater number of Canadians working from home due to the COVID-19 pandemic has had an interesting side effect on home insurance: there are fewer opportunities for fire damage, Flood or theft.
"A lot of losses happen when people are not at home," said Thouin. “Fire or water damage happens when people are not home, or the damage is greater when they are not. There are fewer of these losses. "
Looking ahead, Thouin said property insurance could continue to see downward pressure on prices. "The question is, how aggressive do (insurers) get with it?"
After a challenging year, Property and Casualty Insurance Compensation Corporation (PACICC) reported in June that the industry was showing signs of recovery: claims in property and casualty insurance are lower and investments are increasing. According to PACICC, 87.5% of insurers reported earnings in the first quarter of 2021, “the most widespread profitability in the property and casualty insurance industry since 2007.
“And even in a tough market, Alberta and B.C. Residents will find lower home insurance premiums on LowestRates.ca thanks to a wider range of home insurance carriers on our website, ”the tariff comparison page says.
Feature image from iStock.com/crazycroat