The insurance industry is experiencing a period of increased rates, and we’ve explained everything you need to know about the current climate and how it will impact your upcoming renewal.
What’s going on with insurance rates?
Simply put, when insurance companies are experiencing significant losses, they must make substantial changes to sustain profitability. We’re currently experiencing a time period when insurance company premiums are increasing and their ability (or desire) to write new business is decreasing.
Why is this happening now?
This tumultuous time, also known as a ‘hard market’ is the result of numerous factors, but most noteworthy are, increased frequency and severe losses, political involvement and challenging economic activity.
Considering the fact that our roads are unable to handle the number of cars, trucks, and distracted drivers on them, it makes sense that the frequency and severity of car accidents have increased. Not to mention the costs involved in both repairing automobiles and rehabilitating those who sustain injuries have escalated astronomically.
Furthermore, in the last year, we’ve experienced significantly more natural disasters than we have in years. Due to this, we’ve seen considerably higher amounts of flooding claims across Ontario.
In addition, it would seem that new technology has not improved the underwriting function it was designed to do, therefore, insurance companies aren’t working with accurate projected accounted losses.
How does this impact me?
You can anticipate increased premiums and stricter rule enforcement.
For example, non-payment could result in immediate cancellation or insurance companies could turn away business that is too risky for them to write.
Not to mention, the claims process will also be affected and could result in significant delays.
How can I help myself?
Now more than ever, you should ensure you are doing everything to keep a good standing with your insurance company. You should never miss a payment or be canceled for non-payment because this could have serious repercussions.
Most importantly, you need to speak with your Insurance Broker and have an honest conversation about your current needs.
When will things turn around?
It has been projected to last upwards of 24 months, however, considering the current climate we really cannot say.