Now that the flooding in Alberta has been labeled as the most costly natural disaster that Canada has ever faced, it has become clear that this massive expense will be reflected in future homeowners insurance rates.
The damage is estimated to have reached $1.7 billion, so far, and claims continue to pour in.
Regardless of whether or not they live in a flood zone, many property owners have already seen their homeowners insurance premiums starting to rise, and not just by a nominal amount. This is beginning to make it more difficult for these individuals to be able to afford the same level of coverage that they have always been able to enjoy.
This news has left many homeowners insurance customers frustrated and confused about the future.
According to a seniors advocate from the Kerby Centre, Luanne Whitmarsh “People just have to make decisions, some of that is to have less insurance, have no insurance.” She added that “It’s fine and well to hear you could flood-proof your home, but where are people supposed to get the money for that? Low income folks don’t have that kind of funds.”
Though the majority of homeowners insurance rate hikes likely have yet to be seen, some policyholders have already reported seeing increases as high as 40 percent or more, despite the fact that their properties were not located anywhere near where the flooding occurred. The size of the increases varies greatly from one insurer to the next, by the amount of exposure that the insurer experienced, by the claims history, as well as the specific location of the property.
Experts are already stating that it may not be the best solution to place all of the weight from the costs onto the backs of the homeowners insurance customers. According to the statement of the Insurance Bureau of Canada’s Bill Adams, “At some point, you reach a threshold where people say ‘I can’t afford that anymore’ and then you have another serious issue because people are going without insurance.”