There are plenty of factors that can impact your property insurance costs, from your location and the size of the home to the contents, but one thing that homeowners may not be prepared for is how climate is now affecting their premiums. A recent report released shows Canada is warming up at twice the rate of the rest of the world; this has left insurance providers feeling uneasy. That uneasiness is most likely going to translate to a rise in premium rates.
So how exactly does climate impact your property insurance costs? What should you be preparing yourself for budget-wise? This is a conversation that is really starting to gain speed.
Extreme Weather Risks are Becoming a Reality
While Canada isn’t known for its earthquakes, tsunamis, tornados, and hurricanes, it seems as though the climate and weather patterns are changing. What this means is that extreme weather risks across the country are no longer considered rare. For insurance companies, extreme weather is all about the cost. What does it end up costing the insurance provider thanks to all the claims made by customers?
Taking a look at the numbers between 1983 and 2008, there was $405 million worth in damage each year due to catastrophic loss claims. Catastrophic loss claims are ones that result in more than $25 million in damage. Meanwhile, from 2009 to 2018, catastrophic loss claims resulted in a whopping average of $1.8 billion per year. There is a number of Canadian insurance providers are taking extremely seriously.
What Other Climate-Related Factors Affect the Rate?
So besides the massive increase in catastrophic loss claims, what other climate-related issues are driving the prices up? It seems as though homeowners who live on a lake or close to water are taking some of the biggest hits. Flooding has become more the norm, and it can result in huge loss claims. If you look at water-related losses they actually make up more than half of the total catastrophic claim pay-outs. It may have some people thinking twice about the location in which they choose to own property.
The other climate-related threat that is having a negative impact on insurance rates is fire. There are now promotional campaigns happening across the country on ways you can decrease the odds of your home suffering significant losses in a fire by removing dead vegetation on the property, using fireproof siding, cladding, and shingles, and not storing wood outside in piles.
What Can You Do to Get the Best Rate Possible?
All of these factors have left homeowners wondering what they can possibly do on their end in order to ensure the best rate possible. Clearly, you can’t control the weather, so what is under your control? Canadian insurance quotes provider, LowestRates.ca, discusses how climate change is already costing homeowners. It’s not a future cost increase, it’s happening right now from any Canadian insurance quotes provider.
As Climate Continues to Change So Will the Rates
Unfortunately, there is still so much that needs to be done in order to slow down, and even reverse climate change, which means as it becomes more the norm, rates will continue to increase.