The cost of homeownership is on an upwards trend in Canada. The average premium for a home insurance policy increased by 12% over last year, costing Canadians an average of nearly $185 per year more.
If you live in an area that is prone to flooding, you’re probably all too familiar with the damage that these natural disasters can cause. In addition to the physical damage to your home or business, flooding can also lead to an increase in your insurance premiums. Here is what you need to know about how flooding impacts your insurance rates.
How Flooding Impacts Your Insurance Premiums:
There are a few different ways that flooding can impact your insurance premiums. If you live in an area that is prone to floods, your insurance company is likely to classify or rate you at a higher risk classification. This means that you’ll be charged a higher premium to offset the increased risk of paying out a claim.
In some cases, if your home or business is routinely damaged by flooding, your insurance company may choose to ultimately non-renew your policy. This means that they won’t offer you coverage for the upcoming year, and you’ll have to find a new insurer. Not only will this be a hassle, but it will also likely result in you having to pay a much higher premiums for your coverage.
If you do have flood damage, it’s important to know that some homeowners’ insurance policies may not cover the cost of repairs due to flooding. In some cases, you may need to purchase a separate flood endorsement in order to be protected from this type of natural disaster. And, even if you do have flood insurance, there’s still a chance that you could still end up paying out of pocket for some of the repairs because some polices can specify certain perils and exclude others. Additionally, most policies have deductibles—often $1,000 or more—that must be paid before coverage kicks in.
In conclusion, if you live in an area that’s susceptible to flooding, or high flood zones, it’s important to be aware of how natural disasters like flooding can impact your insurance rates. To make sure you’re fully protected, you can reach out to an advisor on our team to review your policy and make recommendations to protect you better.