A threat by some insurance companies to heftily hike homeowner premiums may or may not have an effect locally.
W. David Baxter, general manager of Gillons’ Insurance, said for most customers, shopping around for the best rate is a good way to avoid costly increases. But, he added, if a client has filed major claims in the recent past, it might make the most sense to stay put and eat the increase.
With the average homeowner in Thunder Bay paying in the neighbourhood of $600 a year for home insurance, any increase would likely it will amount to less than $100 annually, he said.
This week several insurance companies, hit hard by floods in Toronto and Calgary, forewarned consumers their rates were likely on the rise.
Intact Financial Corp., hit hard by last June’s Alberta storms, which caused $1.7 billion in insured damage, according to a story in the Globe and Mail, has said some customers can expect their rates to rise as high as 20 per cent.
The Globe and Mail story estimates losses to property and casualty insurers in the recent ice storms that struck Toronto, Quebec and the Maritimes as high as $600 million.
Baxter said Thunder Bay’s 2012 flood and the 2011 hail storm have had an effect on insurance rates in the city, but the damage was nowhere near that inflicted on other parts of the country, so the region won’t experience as high an increase as those living in Calgary or Toronto.
“We are now seeing minor increases, because it’s spread throughout all of Northwestern Ontario. But Fort Frances and Dryden and Kenora haven’t been hit with the same factors we have (been) with weather,” Baxter said.
“We still have claims out there with fires and other major claims, but not the weather-related. So we’re seeing some increases over the last couple of years of five, seven per cent. Could they get a little higher? Possibly.”
That’s the insurance companies stabilizing themselves regionally, factoring in losses in different parts of the country.
But while companies like Impact have been forced to raise rates in order to turn a profit and stay afloat, Baxter said other companies that offer policies in Thunder Bay and Northwestern Ontario weren’t hit as hard by recent disaster claims in the region.
“So their rates may (only) go up five per cent,” Baxter said.
Of course, shopping around may not be the wisest decision for all consumers, he added. If one tries to jump ship in search of lower rates after receiving a large payout and subsequently has to file another claim, they may find themselves uninsurable or facing higher deductibles.