Home insurance rate increases

The top reasons why home insurance premiums increase

Even if you’re a model customer with no claims, there are many factors that could result in higher home insurance premiums.

1. Extreme weather events and catastrophes are more frequent and severe. As forest fires, floods, storms, and other weather events become more frequent and severe, they cause more extensive damage and result in more frequent and costly claims.
2. Municipal infrastructure is getting older. Outdated municipal infrastructure, a higher demand for water, and the increased frequency of severe weather make sewer backups more frequent, resulting in more damage-related claims.
3. Neighbourhood trends might put you at greater risk. When neighbourhoods grow, demographics and risks change. For example, if there is a new commercial development near your home, or a new subdivision emerges, this might alter municipal infrastructure. These are factors insurers look at when assessing risk.
4. Inflation is making everything more expensive. As inflation leads to higher prices for all goods and services, it also affects the cost of things like emergency services, building materials, and labour. That means paying for claims is more expensive, too.
5. Supply chain disruptions and labour shortages are leading to higher costs. The harder it is to find labour and materials, the more expensive it is to complete home repairs after a damage-related claim.
6. Some new features are eco-friendly, but not budget-friendly. Eco-friendly features like solar panels, energy efficient windows and doors, and high-efficiency appliances are great choices for our environment. But it’s important to realize that if these types of items are damaged, they could require more expensive repairs.
7. Home prices are increasing. Rising home values and more homes with high-end entertainment features (like pools and hot tubs) drive up replacement costs and liability claims.
8. Finished basements need more coverage. Since they’re made with higher-priced building materials, finished basements cost more to repair if there’s a sewer backup or other damage.