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Alberta Home Insurance Rate Increase FAQ

Home Insurance

By Samantha Lemna | December 10, 2019

If you’ve just received your home insurance renewal, you may have seen a big increase in your rates – even if you haven’t had a claim. We’re going to explain what’s going on with home insurance rates in Alberta and, hopefully, answer your questions.

Why are home insurance rates increasing in Alberta?

Home insurance rates are rising in Alberta because of the increasing frequency and cost of claims due to natural disasters and severe weather events. This includes wildfires, flooding, hail, and wind storms.

The cost of repairing or rebuilding homes has also gone up. This is because of higher labour and material costs.

What affects property insurance rates in Alberta?

There are many things that impact homeowner’s insurance rates in Alberta, including:

  • The crime rate of your neighbourhood
  • The claim rate of your neighbourhood
  • How much it would cost to rebuild your home
  • How much it would cost to replace your belongings
  • The proximity of your home to hazards like a river
  • The distance of your home to a fire hydrant and fire station
  • The type of home you have
  • The building material of your home
  • The type and age of your home’s heating, electrical, and plumbing systems
  • The type and age of your roof
  • If you have a pool or trampoline
  • Your demographics
  • Your credit rating
  • Your insurance and claims history
  • Your insurance options including coverage, policy limits, and deductible

These factors are used by auto insurance companies to determine how “risky” you are to insure – or how likely it is that you’ll make a claim.

I don’t have any home insurance claims, why are my rates going up?

Even if you don’t have a claim, your home insurance rates may increase. This is because insurance companies are spreading the costs associated with more frequent and more expensive claims across the customer base.

Your rates may also go up due to other factors, such as a renovation.

I had a claim, how long will my home insurance rates be affected?

A home insurance claim will affect your home insurance rates in Alberta for around 5 years. The impact may change depending on your insurance company and if you had any claims-free benefits.

Why is my home insurance company requiring a new application?

Alberta home insurance companies may request a new application because they want to ensure they have the correct information. This helps them offer accurate rates, discounts, and coverage.

Why is my Alberta home insurance deductible so high?

Your home insurance deductible may be higher for two reasons:

  1. It was raised to the minimum required level by the insurance company.
  2. You’ve had a lot of claims.

Why is my home insurance company requiring me to raise my deductible?

Home insurance companies in Alberta may raise their minimum deductible in order to counteract the cost of claims and the frequency of people submitting small claims.

Why can I not pay my home insurance on a monthly plan anymore?

Some Alberta home insurance companies are reducing their payment options. This includes removing the ability to pay monthly, even if you’ve always paid on time before.

If you need a monthly payment plan, talk to your broker. We may be able to place your home insurance with another company who accepts monthly payments.

Can I get better home insurance rates with another insurance company in Alberta?

You might be able to get better home insurance rates with another insurance company in Alberta. It will depend on why your rates were increased. If your home insurance premiums went up due to claims, you won’t see too much of a difference between insurance companies.

As your broker, we’ll work with you to find the best coverage for the best price. If you’re unhappy with your rates, we can get quotes from other insurance companies as well as help you get lower rates in general.

How can I get lower home insurance rates in Alberta?

Here are a few things you can do to get cheaper home insurance premiums in Alberta:

  • Comparison price with a broker
  • Raise your deductible
  • Bundle your insurance with the same company
  • Improve your credit rating
  • Install approved security or damage alarms or mitigation devices (like security systems, water alarms, and sump pumps)
  • Upgrade an older home’s systems

The value my home is insured to is not even close to what it would it would be worth on the market, why?

Homes are insured for how much it would cost to rebuild them and doesn’t include any land value. The rebuild value of your home is affected by labour and material costs whereas the market value of your home is affected by the economy, real estate market, and your land. These two values can be very different. For example, if the real estate market is really hot, your rebuild value may be far less than the market value of your home.

Why is the dwelling limit on my home higher than my city assessment which includes land value?

Your home is insured for the rebuild value, or how much it would cost to rebuild your home as it was. The city assessment is more reflective of market value, which can fluctuate with the economy.

 

If you have any more questions, talk to your broker or leave a comment below.

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