Future homeowners might want to hold off on making a big purchase. Over the past year, property prices have taken a significant leap across a number of key Canadian markets, according to the Canadian Real Estate Association (CREA), with the average price of a house increasing by 16.8% in Prince Edward Island, 13.1% in Nova Scotia, 5.5% in Quebec, and 2.7% in Ontario since March 2018.
At the same time, insurance rates for homeowners are creeping up as the market hardens. Water claims in particular are becoming a significant problem for insureds, who might have trouble finding affordable insurance if they’ve had a water claim in the past. Other hard-to-place risks can involve properties that are geographically isolated, poorly maintained homes, or individuals that haven’t paid their bills on time. If an insured has filed a lot of claims with another insurance company, that will also make them a higher risk to an insurer.
There are a few key ways that brokers can advise their homeowners and help them save money on insurance without leaving them exposed. Brokers and agents can provide good counsel to their customers about the types of claims they should turn in and the deductibles they should be paying.
“If you take a higher deductible, you won’t be turning in smaller claims,” said Bill Gatewood, corporate vice president and national practice leader for personal insurance at Burns & Wilcox, adding that a series of small claims can lead an insurance carrier to increase rates or cancel coverage altogether.
Homeowners also need to understand what it is exactly that they’re buying in their insurance policy, and what they’re getting with their deductible.
“Buying coverage that you don’t need is another thing that we see, so make sure you’re buying the right policy,” said Gatewood, though he cautioned that homeowners don’t want to be caught without coverage. “If you have a loss, but you saved a few dollars upfront, you end up costing yourself tens of thousands of dollars if your policy doesn’t cover your loss. So ultimately, you want to make sure that you’re completely protected from having to pay out-of-pocket.”
Meanwhile, owners of high-value properties have a unique set of needs when it comes to their property insurance.
“Affluent clients need to make sure that they’re with an insurance company that specializes in that type of coverage, because it isn’t just an insurance policy – it’s how the whole claims process will be handled, and the level of customer service that they’re going to receive is going to be different and tailored towards the affluent market,” explained Gatewood. “If they’re with a standard insurance company, they don’t have the same concierge-type service that is available with the specialty companies that handle the marketplace.”
There are also additional coverages available for affluent homeowners that hire employees who work on their properties, such as nannies, drivers, and gardeners, and might not be covered under a standard insurance policy.
Ensuring that an affluent client’s policy makes them whole again should they have a loss is another critical consideration.
“Often, affluent homes are older homes that have been restored. If you have plaster walls, you don’t want to get drywall back. If you have imported teak wood floors, that’s what you want back in your house – not something that you can pick up from Home Depot,” Gatewood told Insurance Business. “They need to make sure that they’re purchasing a policy that will give them exactly what they had before in the event of a loss.”
Burns & Wilcox offers solutions for a variety of homeowners’ needs, in turn enabling insureds to get the most out of their product offerings.
