Why Are My Insurance Rates Going Up?
5 Reasons why…and what you can do about it
If you have been asking yourself, “Why are my rates going up?” lately, you’re not alone. The home insurance and car insurance industry is going through very turbulent times. Canadian insurance companies are looking long and hard to improve results of recent years and the byproduct, at least in the short term, is increased rates for clients. The reality is that insurance rates have not kept up with claims trends and insurers are not able to continue renewing risks at a loss. Without changes to the cost of providing insurance to clients, the only solution is rate movement on both car and home policies.
But what’s the cause?
Let’s focus in on the 5 Reasons why insurance rates are changing and talk about What you can do to save money on your car insurance and property insurance.
5 Reasons Why Rates are Changing?
- Newer vehicles cost more to repair: You know all those really cool gadgets in cars today…. Well they cost a lot! The advanced technology in today’s vehicles are more sophisticated than ever before. Lane change tracking, automatic braking, sensors, smart cruise-control, windshield cameras, are all complex computer components, and these vehicle tend to cost more to repair than older vehicles.
- Distracted driving: The unfortunate reality is that distracted driving is on the rise. Mobile devices are an incredible technology but their use comes with some hefty costs. The surge in use while in a vehicle is leading to a spike in distracted driving meaning a greater number and more severe accidents.
- Extreme weather events: Severe weather across Canada and the world, is becoming more frequent. Wildfires, ice storms, tornadoes, flooding and other damaging events are costing insurance companies more than ever before to get their customers back on their feet. As these severe events become more common, insurance companies need to increase their rates so they can afford to pay the claims that occur as a result. According to Canadian Underwriter magazine, there were a total of 12 Canadian catastrophes last year alone (a catastrophe is an event that causes more than $25 million in insured losses), as well as nine notable events (insured losses of between $10-25 million). Over half of those catastrophes impacted Ontario!
- Fraud: The Insurance Bureau of Canada claims that fraud costs consumers an estimated $1.6 billion each year. The industry and companies are actively undertaking measures to control fraud which will minimize the impact on customers but until this gets resolved, every premium will be inflated.
- Increased repair/medical costs: The cost of clean-up , skilled trades and medical services are all higher today than ever before. If your home needs repair or you are badly injured in a car accident, insurers have to factor an increase in expenses into their premiums.
…and What you can do About it?
Many factors go in to determining your home and car insurance. Here are a few things within your control that may help the next time you open your insurance renewal.
Preventative measures. Accidents and claims happen, which is what insurance is for – but taking the time to consider simple measures can help prevent these accidents leading to fewer claims, and less hassle for you. With an established, claims-free record, insurers will reward you with lower premiums. By taking preventative steps such as staying conviction free, reducing distracted driving, installing water back-up valves, home alarm systems, winter tires on your vehicle, etc. you may benefit from an overall premium savings. Your Broker can walk you through the various steps that will help prevent a claim, AND make sure you get all the discounts you qualify for.
Talk to your Broker. Insurance can be complex – we hear it all the time. Talking to your Broker to get the latest insight on newly introduced discounts, policy ratings and other details within a policy that could help maximize your savings. Independent insurance brokers also represent a number of insurance companies, so asking your Broker to review other insurers could be to your benefit. At Rhodes & Williams, we represent 10 different insurance companies for your personal insurance needs. This means the right insurance company, offering the right protection for your unique needs, at the right price.
If you have questions about your own auto insurance or home insurance and want to make sure you are getting the best price available for your unique needs and budget, reach out to a Rhodes & Williams Insurance Broker today – we’d be pleased to help.