5 Costly Trends Impacting Homeowners Insurance
One of your roles as a homeowner is to constantly monitor current events, news and other things that could impact your home, especially from a financial perspective. Changes in the market, increases in property tax, and even an increase in building supplies can all impact the cost of running your home on a monthly basis.
Staying on top these things helps you to take a proactive approach to managing your home and keeping your costs under control. But, what about home insurance? What are the costly trends that are currently impacting homeowners insurance for Canadians?
There are actually a number of trends today that are having a direct impact on home insurance rates:
- Poor credit scores: Once you are approved for a mortgage and you buy a home, you still need to maintain a good credit score. Credit scores are often a factor when it comes time to renew your home insurance policy and maintaining a good credit score is important not only for home insurance, but for many other areas of your life as well.
- Higher than necessary insurance: We currently live in an era where many people are living above their means. People are buying more house than they need, and these bigger homes results in higher home insurance costs.
- Unpredictable weather and living in coastal regions: We all know that location plays a role in the cost of your home insurance. However, if you live in a coastal region, and one that is prone to severe weather, you can expect your home insurance rates to be higher than if you lived inland, where weather poses less of a risk to your home.
- Insurance fraud: Insurance fraud continues to be an issue for home owners. The high rate of insurance fraud in Ontario continues to drive up insurance costs for everyone.
- Modern coverage needs: Technology continues to change how we manage our home, but it also poses additional risks. Technology has opened the door to an increasing threat of identity theft, cyber theft, and the potential of home security systems getting hacked – all factors that could impact insurance rates into the future.
At the end of the day, these factors are all tied together with one common element – risk. Your home insurance rates are tied to the amount of perceived risk from insurance companies. If you have a number of risk factors in your insurance profile (for example, you have a high credit score and live in a coastal region that frequently get hurricanes) you will pay more for insurance.
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