Increases in home insurance premiums can cause a lot of stress and frustration for homeowners across Alberta. If you’ve ever compared your home insurance to someone else’s, you probably already know that even very similar homes can have vastly different terms and premiums.
It can be tough to tell exactly why a premium is set at a specific level by an insurance company, or to understand why you do or don’t have access to some options. That’s why many homeowners in Edmonton choose to work with a professional insurance broker; a broker provides a clear channel of communication between insurers and customers. Our team is able to explain the factors that impact your insurance rates and policy inclusions and exclusions.
If you want to understand more about your home insurance policy or how to get better options and rates, the best place to start is understanding the main factors that impact your home insurance. Let’s look at a few critical pieces of information an insurer uses to underwrite a policy.
Home Insurance in Alberta
Home insurers take a multitude of elements into consideration when they’re determining how to protect your home. Everything from the size and composition of your property to your proximity to water can affect how high your insurance rates are. Some of these factors are unavoidable; if you’re buying a large lakefront property, your insurance will inevitably be higher than that of a smaller home away from water.
However, you may have greater control over other factors that affect your home insurance. Improved security and upgraded plumbing are just two of the many ways you can decrease your insurance rates or get more comprehensive coverage.
Factors That Can Affect Your Home Insurance
Backwater Valves
No one wants to have a water damaged basement, let alone a basement filled with sewer water. A backwater valve (also known as a backflow valve) prevents sewage water damage in your home by closing off the main sewer line when it becomes overloaded thanks to heavy rain or backups. Essentially, this is a valve attached to your main line that will close before sewage gets a chance to backflow into your home.
Depending on where you live, backwater valves may be required. For areas that experience frequent water damage, it’s critical to have a backflow valve in place. Even if it’s rare for sewers to back up in your area, a backflow valve can help you prepare for the worst.
So, how will having a backwater valve affect your insurance? Once again, it partially depends on other factors, such as the frequency of water damage events and the general location of your house. If you live in an area where water damage events are prevalent and you don’t have a backwater valve, it’s likely that your home insurance rates will be much higher, thanks to the risk of water damage.
Distance from Hydrants and Fire Stations
When your house is burning, every second counts. The closer you are to a fire station or hydrant, the lower your insurance rates will likely be. The extent of fire damage can increase drastically in just a few minutes, so the less time it takes the first responders to arrive, the better. For this reason, ratings on fire protection will be better for urban homes than rural ones.
Proximity to Bodies of Water
Homes located close to bodies of water will generally have higher insurance rates than their counterparts due to the significantly higher risk of flooding. However, there are some exclusions under your home insurance, and one of those exclusions is flooding. You may want to consider purchasing separate flood insurance, even if you’re not close to a body of water.
Flood insurance offers comprehensive protection against different types of flooding, including river and urban floods. If you don’t have flood insurance and your home is affected by a flood, it most likely won’t be covered by your home insurance, which can result in major direct financial losses.
The Age & Condition of Your Roof
The older your roof, the more likely it is to suffer from problems like leaks. Typically, insurers like to see roofs that have been updated within the last 18 years. This means that newer roofs will see reduced premiums compared to their older counterparts. Plus, some insurance policies will only pay depreciated values for older roofs, seeing as they’re near the end of their lifespan.
Credit History
Insurers use your credit history as a predictor of your future credit behaviours, which is why it’s so important to keep up good credit. If they notice lots of negative credit history, it will significantly raise your insurance premiums, as you pose a greater risk for non-payment than other clients. Meanwhile, homeowners with a good credit history often get great deals on insurance rates, as insurers know they are reliable.
Personal Claims History
Like your credit history, a bad claim history will have a negative impact on your insurance premiums. There’s a clear correlation between making a claim and additional claims being made in the future. This means that when you file an insurance claim, you’re far more likely to do so again in the future. Different claims will increase your premiums by different amounts; while filing even a single claim can increase premiums by up to 20%, claiming a second time could result in increases up to 44%. This isn’t to say that you shouldn’t claim against your home insurance when you need to; however, it is a good idea to consult with your insurance broker about how claims might impact your future insurance rates.
Wood-Burning Stoves
Wood-burning stoves are desirable for many homeowners. However, they pose a far more significant risk than regular stoves do, and insurers consider them as such. Unfortunately, this also means higher insurance premiums.
If you have a wood-burning stove in your house, be sure to provide the insurer with proof that it was installed by a licensed contractor and meets the code requirements. Additionally, tell your insurer if you have an easily accessible fire extinguisher. Informing your insurer of these may help you to avoid major premium jumps.
Which Insurer You Choose & Which Broker You Use!
Maneuvering your way around the world of home insurance can be intimidating, but it doesn’t have to be!
At Cornerstone Insurance Brokers, we want you to get the most out of your insurance, whether it’s home insurance, auto insurance, commercial insurance, or otherwise. We’re here to help you choose the right coverage for your home, balancing affordability with excellent coverage designed for your home. We have access to Alberta insurers with great home insurance options that we can compare on your behalf.
Request an insurance quote today to find out how we can help you discover your ideal home insurance policy.
