January 8, 2014 by Romina Maurino - THE CANADIAN PRESS
TORONTO – Home owners should prepare to pay more for property insurance as the severe weather trend that has battered the country during the past year is expected to continue.
”There are more and more storms happening, and we’re seeing extreme weather events that happened once every 40 years… that can now be expected to happen once every six years,” said Pete Karageorgos, manager of consumer and industry relations at the Insurance Bureau of Canada.
”Trends for the last few years have been that we’re seeing storms occur with greater regularity so the amount of claims that have been presented have been averaging about a billion dollars a year over the last three years or so.”
While the industry group doesn’t comment on specific premiums, Karageorgos said costs will drive prices in the insurance industry.
”When your costs go up, the prices are going to follow. It’s like that for a cup of coffee and insurance is the same,” he said.
Intact Financial Corp. (TSX:IFC), one of Canada’s largest property and casualty insurers, raised premiums by 15 to 20 per cent during the past few months as catastrophic losses and weather-related claims have risen.
The company has also introduced peril-based pricing and changes in the products, and is increasing its push to educate customers on how to limit the impact of storms. Deductibles have also been increased in most provinces, with a base deductible of $1,000 instead of $500.
”From water to wind, the impacts of climate change coupled with urban growth, aging municipal infrastructure and the greater prevalence of finished basements are posing new challenges to the industry,” said Intact spokesman Gilles Gratton.
”The insurance product must evolve and adapt to reflect emerging climate change risks and ensure the home insurance product is sustainable, to ensure its availability and affordability across the country for the long term.”
Catastrophic losses insured by Intact over the last three years represented between 10 per cent and 20 per cent of Intact’s total claims costs in personal property, Gratton added, noting that water damage, wind and hail claims now represent more than 50 per cent of the company’s insured losses in personal property.
According to the Insurance Bureau of Canada, the amount of insured damage resulting from extreme weather in Canada grew from less of $200 million in 2006 to $1.2 billion in 2012.
In the past year, the combination of massive flooding in Alberta in June and a one-day torrential rainfall in Toronto in July brought the overall amount of insured property damages across Canada to $3 billion.
The ice storm that crippled Toronto and other parts of Ontario, Quebec and the Atlantic provinces over the Christmas holiday left thousands of people without electricity for days. Frigid temperatures from a system dubbed a ”polar vortex” suspended and delayed flights earlier this week in Toronto, Montreal and Ottawa.
It’s still too early to say how much the deep freeze will cost, but Glenn McGillivray, managing director of the Institute for Catastrophic Loss Reduction, said the latest storms are part of an ongoing pattern that should alert homeowners.
”It’s just been five horrendous years in a row,” McGillivray said.
”We think this is the way it’s going to be going forward. It doesn’t mean we’re going to have really bad years every year, but it does mean that they’re no longer going to be rare.”
Photo [above, top]: Toronto Hydro forester, Brian Flint, clears a large tree branch before restoration efforts can begin on Dec. 23, 2013. (TorontoHydro Twitter)
GRAPHIC: What is a polar vortex? http://t.co/OPyZuqVUWE pic.twitter.com/tJMqAVBgkG
— CBC Top Stories (@CBCNews) January 6, 2014
Homeowners still cleaning up from #icestorm2013 concerned over calls for more freezing rain #sl pic.twitter.com/JaD06t3PrQ
— Charlsie Agro (@CBCharlsie) January 5, 2014
This composite image of the US reveals massive winter storm blanketing the Eastern seaboard http://t.co/86e6Hlwyiz pic.twitter.com/YiYFdpfUcQ
— NASA (@NASA) January 3, 2014
A week since the devastating #IceStorm thousands remain in the dark despite crews working tirelessly to restore power pic.twitter.com/QUwCLGLwRW
— Scott Meiklejohn (@ScottyTWN) December 29, 2013
#Toronto Deputy Mayor Norm Kelly says city has lost about 20% of its tree canopy due to #icestorm2013. Plan in works to clean up debris.
— CBC News Alerts (@CBCAlerts) December 27, 2013
Steve Kee @InsuranceBureau gave informative interview on #icestorm2013 on #CanadaAM pic.twitter.com/9aYfl1Vd6h
— Dan Murray (@DanMurray_CR) December 24, 2013
Will insurance cover #icestorm2013 damage? @steve_kee explains: http://t.co/bbFoORA4GR @CTVCanadaAM
— Watch CTV News (@WatchCTVNews) December 24, 2013
VIDEO: What insurance may and may not cover after the #icestorm2013 http://t.co/wNEv6DSjyy
— CityNews Toronto (@CityNews) December 24, 2013
We strongly advise those customers without power to be prepared to sustain an extended outage over the next number of days #pwrout
— PowerStream Inc. (@PowerStreamNews) December 25, 2013
The beauty and destruction of my Brampton street #torontoicestorm #citystorm #icestorm2013 pic.twitter.com/pgMuGKeREN
— Martin Brown (@MartinBPhoto) December 22, 2013
Trees, ice and cars, a bad combo in Toronto today. pic.twitter.com/T1F16eLq65
— geoff cape (@gcape) December 22, 2013
Older areas of #Brampton hit especially hard w/ falling wires & trees. This is on McMurchy Avenue. #onstorm pic.twitter.com/FYHCbj1RFK
— Jeremy Cohn (@JeremyGlobalTV) December 22, 2013
The street is falling apart – and it’s getting colder, still raining #onstorm #icestorm2013 #icestorm #Toro… https://t.co/uaglgGpTO8
— Steve Wilson (@InsuranceMedia) December 22, 2013
Happy to know that I started a string of skating and hockey on my street! #ygk #icestorm @Krock1057 @cityofkingston pic.twitter.com/NHabz3F7CM
— Adam De Rocco (@AdamDeRocco) December 21, 2013
High Res Model brings heavy precip/FRZrain by 2 am to GTA & temps dropping to -1 for most. #icestorm2013 #onstorm pic.twitter.com/DbQuHZ5dj0
— Jaclyn Whittal (@jwhittalTWN) December 22, 2013
Skating down the streets in Kingston! #icestorm #icestorm2013 pic.twitter.com/IvMkGi9Uxn
— Andrea Loken (@AndreaLoken) December 21, 2013
Makeshift street curling #onstorm #icestorm north of Steeles Ave., #Toronto / GTA https://t.co/QnCSgSzEHj
— Steve Wilson (@InsuranceMedia) December 21, 2013
Skating down the road in #ygk after some ice #onstorm https://t.co/A86MgNDO2K
— Jennifer Baker (@JenniferBakerCo) December 21, 2013
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