Canada's home insurance market facing "inevitable price recalibration"

Canada’s home insurance market facing “inevitable price recalibration” | Insurance Business Canada

Property

Canada’s home insurance market facing “inevitable price recalibration”

Shift parallels trends in the auto insurance sector

Property

By
Terry Gangcuangco

The Canadian home insurance sector is on the brink of “a significant shift” in 2024, according to insurance comparison website MyChoice, which notes a 7.66% increase in home insurance rates in the country.

The trend draws parallels to the auto insurance market, MyChoice added. Higher home insurance prices are to be expected this year, on top of rises seen at the start of the year:

Country/Province

Replacement Costs YoY

Inflation (January 2024)

Home Insurance YoY Inflation

(January 2024)

Canada

4.69%

7.66%

Newfoundland

6.89%

Prince Edward Island

4.78%

0.88%

Nova Scotia

-0.83%

8.27%

New Brunswick

-1.11%

2.39%

Québec

7.12%

8.02%

Ontario

4.92%

6.32%

Manitoba

-1.52%

11.31%

Saskatchewan

1.35%

12.16%

Alberta

6.86%

9.25%

British Columbia

2.82%

7.63%

“The high inflation witnessed in 2023 is a precursor to the anticipated developments this year,” MyChoice said.

“Even though inflation is expected to return to the 2% target in 2025, high claims costs, soaring repair and replacement expenses, and increased climate-related disasters have set the stage for this inevitable price recalibration.”

MyChoice went on to highlight the compounding effect that the climb in home insurance prices will have on homeowners’ financial pressures, especially in cities where mortgage delinquency rates have surged.

Commenting on the looming difficulties, MyChoice chief executive Aren Mirzaian said: “At MyChoice, our dedication to offering our customers a wide range of home insurance options stands firm, even amid these evolving challenges.

“We are committed to providing our users with extensive choices, ensuring they receive affordable coverage. As we navigate these turbulent waters, our focus on transparency, education, and support has never been more critical.”

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