Canadians believe climate change is hiking coverage costs: Survey
Consumers are more aware of their risks, but are equally concerned about their increased costs
Canadians are connecting the dots between higher insurance bills and increased damages from climate change-related weather events, according to a recent survey conducted by First Onsite Property Restoration.
More specifically, three-quarters (74%) of Canadians believe climate change is driving up home and business insurance costs, according to First Onsite’s annual Weather and Property Survey, which surveyed more than 1,500 adults across Canada. That’s an 8% increase since last year.
“We’re definitely getting those questions a lot more than we ever had (from consumers saying), “This is now the second time I’ve had to deal with this (loss). What can I do?’” says Jim Mandeville, senior vice president of large loss for First Onsite.
“There’s a lot of little things that can be done at the time of renovation, and especially at the time of construction, that can really go a long way to making these buildings much more resilient.”
Costs increasing
Canadians’ top 3 concerns about their property after facing severe weather events all relate to increased costs.
Worried about repairs
Nationally, 74% say they’re concerned climate change is driving up the cost of their insurance; 72% worry about the cost of major renovations or repairs; and 69% are concerned about the loss of valuables or personal items.
It’s a fear that may be actualizing — more than one-third of respondents (36%) report having already experienced increases in their property insurance rates.
The good news is there are many upgrades homeowners can make when renovating or building homes that can make their properties more resilient.
“We can do things like using water-resistant drywall instead of regular (drywall). We can make modifications to the plumbing system, so we don’t have sewer backups,” says Mandeville. “We can increase the amount of insulation in the walls when we’re doing renovations, which has a twofold effect of helping to prevent wintertime damage like frozen pipes and also helps lower our energy bills.”
Weather-resilient upgrades
These weather-resilient upgrades tend to be only a bit more expensive than replacement costs, he says.
“We’re talking about 5% to 10% of cost. We’re not talking about double or triple (digit increases). Most of the time, they’re usually relatively small dollar investments as a percentage of total cost.”
Though the cost often is upfront, Mandeville says any effort into making a home more resilient “will potentially pay massive dividends down the road, because we just don’t know what’s going to happen with the continued evolution of our climate.”
But the decisions and the costs associated with upgrading rests with consumers rather than insurers, Mandeville says.
“When it comes to insured losses, generally speaking, coverage is going to be for what was there before. And if there is an increased cost, that cost has got to be borne by the policyholder,” he says. “And then it comes down to a question of dollars and cents for that policyholder as to whether they’re capable or interested in making that investment at the time.”
- Canadian Underwriter