Home insurance up 7% in Canada, report says. How to cut costs
Home insurance has become more expensive in Canada this year amid soaring replacement costs and extreme weather events, according to a new analysis.
But experts say there are ways for homeowners to keep their insurance expenses in check.
In January, there was a 7.66 per cent increase in the national home insurance price compared with the same time last year, according to a report published Tuesday by My Choice Financial, a Canadian insurance aggregator and comparison website.
As long as claims continue to increase, the insurance industry will respond by raising rates to pay off those claims, said Daniel Ivans, an insurance expert at Ratesdotca.
“There’s increasing financial pressure that it could put obviously on first-time homebuyers or even anybody that’s on a budget where you’re seeing these substantial increases in insurance,” he told Global News in an interview.
“It could be a bit of a challenge.”
This comes as the Bank of Canada continued to hold its key interest at 5.0 per cent in its latest decision Wednesday.
The high lending rate is already weighing heavy on homeowners, especially those with variable mortgage plans.
While overall inflation has eased in Canada, reaching 2.9 per cent in January, the surging costs for home repairs and replacements have hiked the insurance premiums, the My Choice report said.
Climate-related disasters and higher insured damages are also major contributing factors.
“Home insurance prices depend on the proximity to areas where natural disasters happen most often,” Vitalii Starov, vice-president of growth at My Choice, told Global News.
“While it’s not as relevant for Canada as it is for the U.S., it’s becoming a more important factor with climate change.”
After a warmer-than-usual
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