Greg covers some of the main reasons as to why we are seeing increasing insurance rates across the board in this episode of Ask The Expert. 800 CHAB radio presents Ask the Expert with Greg Marcyniuk of Heritage Insurance located in Moose Jaw.
Here's a full transcript of the episode.
Rob Carnie: With Greg Marcyniuk from Heritage Insurance today, Greg, an oft-asked question these days, why are my insurance rates increasing? It's happening across the board, my friend.
Greg Marcyniuk: Yes, it is Rob. And there could be a couple of reasons. First and foremost, if it's for yourself, and if you have filed a claim, you should consider when you are filing a claim, whether or not you should, because typically, you will lose either a 10% to 15% discount, and that claims-free discount drops off for a three-year period.
So, we always really encourage people to think twice before they do file a claim just for that specific reason. Now, when it comes to the companies and why we're seeing the rate increase, first, it's with interest rates being so low, insurance companies do have to carry reserves, and these reserves are set aside in the event of a large claim.
And because interest rates are low, they're not getting the rates as what they normally would. The second thing is what we, in the insurance industry, call CAT claims, and CAT claims are catastrophic claims. Now just alone in Canada this last year, like for example, Fort Murray and their flood that was a $562 million cost.
And then the second one is Calgary, they were hit with a hailstorm. And this was the most expensive, not only hail claim, but claim as far as a catastrophic claim, at $1.3 billion. And then there's also a wind claims throughout and hail claims throughout all of Canada.
So, just in Canada alone, the insurance industry was hit pretty hard. Now nationally, there were hurricanes, there was wildfires, there was flooding. And with these wildfires, there was also lawsuits. What happens is most insurance companies use what we call reinsurers, and they assume part of the risk.
Well, these reinsurers insure all across the world and specifically in North America. So, their costs have increased as well. So, with climate change, all of these things happening, we're just seeing the pure cost of insurance actually, an increase, an increase quite dramatically. And, again, with the accumulation of all these, this is just increasing and adjusting the prices for all of these companies.
And unfortunately, Rob, they're saying these costs are probably going to carry on till at least 2023 unless interest rates come up and if we see less storms.
Rob: We should also point out that as brokers at Heritage insurance, you shop around and you find the best prices for us.
Greg: That's correct. As with any of the other companies out there, we do have multiple companies, and we always go after to find the best value for your insurance dollar here at Heritage Insurance.
Rob: If you need further information, or an update on your insurance, or have any questions at any time, feel free to get in touch with Heritage Insurance. How do we do that, Greg?
Greg: You can either give us a call at 1-800-667-7640 or come on down to the corner of Fairford and first and you can reach us online at, heritageinsurance.ca.
(Video transcription by Speechpad)