Climate change, severe weather events putting pressure on home insurance prices, according to My Choice Financial Inc.
B.C. homeowners who are weathering the storm of high mortgage payments may have to brace themselves for more financial pressure.
Home insurance prices increased by 7.63 per cent between January 2023 and January 2024, with further rises in prices expected throughout this year, according to insurance comparison website My Choice Financial Inc.
Meanwhile, replacement costs increased by 2.82 per cent in the province during the same period.
“While traditionally seen as a primary driver, replacement costs alone do not dictate the trajectory of insurance premiums across provinces. For example, Manitoba’s anticipated 11.31 per cent home insurance inflation rate starkly contrasts with a -1.52 per cent change in replacement costs,” said My Choice in a March 5 press release.
Climate change and severe weather events are placing upward pressure on home insurance costs at a time B.C. residents are already missing mortgage and credit card payments.
“Each year, the insurance industry grapples with the growing challenge of covering losses from wildfires, floods and other climate-related events, necessitating a recalibration of rates to keep pace with this escalating risk,” My Choice said a statement.
Severe weather events caused $3.1 billion in damages across Canada in 2023, representing the second year in a row the country exceeded $3 billion in insured damage, according to January 2024 data from the Insurance Bureau of Canada. It’s also marked the fourth-worst year for insured losses.
B.C. incurred $720 million in insured damages due to severe weather events in 2023 – the highest amount in Canada, according to My Choice. The combined totals of Ontario and Quebec came to $710 million.
As home insurance prices rise, auto insurance is also seeing a spike in pricing. Passenger vehicle insurance premiums increased by six per cent across Canada between December 2022 and December 2023, according to Statistics Canada.
“As we head into 2024, elevated inflation and rate increases will only mean higher premiums for customers,” Shaistha Khan, an author with Ratesdotca Group Ltd., said in a Jan. 26 blog post that examined the StatCan data.
