Due to increasing frequency and severity of weather related disasters such as flooding, storms, and drought, the Canadian insurance industry is paying out claims at record rates. Several years of extreme weather have caused the insurance industry to pay out more and more in damages. This means Alberta home insurance rates are on the rise.
At Bow Valley Insurance, we offer personal, commercial and group insurance policies and as brokers we are partnered with multiple insurance providers. As home insurance premiums increase, working with a broker ensures you’ll find the best policy to meet your needs.
There are two major factors driving home insurance rate increases: warming temperatures and new home designs.
The Weather is Changing and Alberta is Experiencing More Violent Storms
Warming temperatures are creating new weather patterns that are causing severe damage. More violent storms are creating more claims, and this is forcing insurance companies to develop policies that address new risks.
During the last 10 years, an average of 785 natural disasters occurred annually around the globe.
Water damage has for the first time surpassed fire damage as the nation’s leading cause of loss to homes and resultant insurance claims. Across Alberta, a significant increase in the number and severity of storms experienced on an annual basis has occurred.
The Effects of Warming Temperatures on Alberta Home Insurance Rates
In Canada, five major weather events totaled nearly $1 billion in claims in 2009. The industry paid 88,250 claims in 2010 after seven major weather related events, at a cost of nearly $1 billion. In 2011, claims totaled 99, 550 at a cost of nearly $1.6 billion.
As a nation, Canada is experiencing more catastrophic weather events, and Alberta in particular is experiencing more destruction from rain, wind, and hail. Tornadoes have touched down in Edmonton, Calgary has become well known for its hailstorms, and the Slave Lake fire and subsequent torrential rains devastated hundreds of homes and businesses.
Warmer temperatures are producing weather patterns that are creating more violent storms than ever before, and in some regions, catastrophic weather events that once occurred every 40 years are happening every six years.
Canadians now experience at least twenty more days of rain and hailstorms associated with the warmer temperatures, and those numbers are expected to increase.
These factors combined mean costs will be even higher for the insurance industry in the future.
Homes Are Larger and Damage Is More Expensive to Repair
Water damage is now the single greatest cause of home insurance claims. Homes are getting larger and more damage occurs; thus, claims have become more expensive for insurance providers.
In 1950, the average Canadian home was 800 square feet. Today the average size of a home has more than doubled, and is now 1,900 square feet. It’s important to minimize or eliminate the risk of water damage to your home. Consider working with a contractor to look for ways to reduce your risk of water damage.
Finished Basements Are More Commonly Used as Living Spaces
Basements are prone to flooding as well as other types of water damage. Once used primarily as storage space, finished basements have become much more common and basements have become living spaces. This means furniture, electronic equipment, and other valuables are placed at higher risk. When water damage occurs, these items are more expensive to replace.
When laundry rooms are located on higher floors, flooding often results in more extensive damage and is more expensive to repair.
Work With a Broker to Find the Best Alberta Home Insurance
At Bow Valley Insurance, we offer Personal, Commercial, and Group Insurance policies in Calgary, Edmonton and Alberta. As brokers, we work with several insurance providers. This means we have the ability shop around for the best rates and to customize policies to ensure complete coverage.
If you have any questions about your policy or rising home insurance rates, please contact us today or try our convenient Personal Property Insurance Estimator to receive a free estimate for home, tenant, or condominium insurance.
As Calgary Home Insurance rates rise, Bow Valley Insurance promises to find you the best home insurance policy to meet your needs!