in quebec, homeowners pay an average of $1,450 a year for home insurance.
- 17 Sites Like Rabb.it (Alternatives) to Watch Videos With Friends in 2022
- What is Bond Insurance and How Can Benefit Your Business | Gebhardt
- What is Coinsurance & How Do Medical Claims Work? | eHealth
- NIO Vs. BYD: Which Chinese EV Stock Is A Better Buy? (OTCMKTS:BYDDF) | Seeking Alpha
- Best Cheap Auto Insurance Quotes in Delaware (2022) – ValuePenguin
That’s right. the more money you have to spend on that beautiful new home you just bought.
And you thought this was a happy occasion.
Which do you want to hear first: the good news or the bad news?
we will decide for you.
According to a 2019 study by j.d. electricity, Quebecers pay, on average, $984 per year for their home insurance.
And according to data from kbd insurance, by 2022, homeowners now pay an average of $1,450 for their home insurance.
That’s the lowest amount in all of Canada!
That’s the good news.
and speaks to the fact that there is not much regulation in quebec compared to the other provinces, some of which administer insurance through their provincial government.
in quebec, we have many financially healthy insurance companies competing for your business.
For customers, that means a lower average cost of home insurance.
the bad news?
rates are rising.
they went up in 2021 and will go up again in 2022.
Back to the good news: Even after our province’s largest price increase since 2016, we still have the lowest insurance prices in the country.
If that’s all you wanted to know, you can go.
but we have much more to cover in today’s blog:
- why are home insurance prices in quebec rising?
- reducing the cost of your home insurance
- how much homeowners insurance do i need?
- get cheap home insurance quotes in quebec
- how home insurance claims affect your premium
- how to find the best home insurance in quebec Quebec
But first, let’s talk about that rate increase and, most importantly, address the why.
why home insurance prices are rising in quebec
Not that all the clickbait is yours, but home insurance rates in Quebec are going up, and the reason why may surprise you.
In reality, however, there are two simple factors at play.
The second one in particular is interesting, and it’s something you might not have thought about.
But first, a quick economics lesson.
supply and demand: surely you know it.
When the supply of a product or service is low and the demand is high, it costs more.
Let’s say there’s a high demand for something, like wood, but there’s not enough to satisfy everyone.
The people who sell the wood can increase their prices and continue selling.
Now, let’s say there’s a limited supply of contractors, the workers responsible for construction or renovation projects.
As long as demand is high in that market, those contractors can charge more for their work.
now some data.
a leger survey from January 2021 revealed that more than 80% of quebec renovation and construction companies have faced slower delivery or transit times and reduced supplier inventory.
so stock is coming in low and slow.
another leger survey from december 2020 showed that 65% of quebec homeowners had made renovations in the previous 10 months.
so the appetite for projects that require certain materials is high.
the demand is there. supply is not.
Which brings us to reason 1 why rates are rising: the cost of materials is rising.
we can attribute it to the combination of high demand and low supply that we just explained.
Who has to pay for those materials when you file a home repair claim?
your insurance company.
but you don’t want to lose money, so you just pass on that increased cost to your customers.
and our second reason why home insurance rates in quebec are going up is this:
yeah, quebec roads suck. you know that.
but what does that have to do with insurance?
well, we’ve oversimplified it by referring only to potholes.
But here’s the thing: When you file a homeowner’s claim, your insurance company hires a contractor to do the repairs.
Where are all those contractors and tradesmen at right now?
They are repairing roads, bridges and highways.
they are building hospitals.
infrastructure spending in quebec and especially in montreal is through the roof right now.
Accompanying that, the cost of labor has increased by approximately 10% each of the last three years.
so there are fewer contractors for insurance companies to hire, and the ones they do hire are more expensive.
again, the increased cost is passed on to who else but you, the customer.
how to reduce the cost of your home insurance
How often does the average person file a home insurance claim?
- every 6 months
- once a year
- once every 5 years
- once every 20 years
think about it…
in the meantime, a word about lowering your price.
we just explained that quebec’s home insurance is still the lowest in canada, although its rates are increasing.
That’s not to say there aren’t things you can do to keep your costs relatively low.
Here are six of our best tips for achieving annual and monthly savings on your home insurance.
raise your deductible
okay, time’s up.
the answer to our trivia question?
The average person claims on their home insurance once every 20 years.
By doubling your deductible from $500 to $1,000 per occurrence, most companies will offer you a 5% to 10% lower rate.
Let’s say you increase your deductible from $500 to $1,000.
More than 20 years without a claim, you save 10% annually on your premium.
Now suppose you finally make that claim in year 20.
You’ll pay a measly $500 extra out of pocket and save thousands in the long run.
that’s a no-brainer!
At kbd, we suggest that all home insurance policies have a minimum deductible of $1,000.
Bottom line, if you can afford a higher deductible, go for it!
The higher your deductible, the higher your discount.
avoid making small claims
Claims stay on your file for five years and remain there as little red flags that tell insurance companies that you might be at high risk.
Essentially, the more claims they see, the more they’ll charge you.
Definitely don’t be that guy who says, “well, it wasn’t my fault, so I’m going to claim it!”
It’s rarely your fault, that’s what insurance is for!
and that’s not the point anyway.
Avoid making claims whenever possible and especially those you could pay yourself without consequence.
install a centrally monitored alarm system
You can get a great discount by installing a water sensor alarm accompanied by an automatic water shut-off system.
reducing the risk of flooding or roof leaks can greatly reduce the perceived risk of filing a claim.
The same goes for fires and burglaries, so any steps you can take to reduce those risks would be a good thing.
Celebrate being mortgage free
I am the president of an insurance brokerage.
I would say I know the industry pretty well.
and I can usually explain why insurance companies do what they do.
in this case, I can’t.
Home insurance companies give discounts of about 10% to people who have paid off the mortgage on their home. I have no idea why!
and you know what?
I don’t care!
Tell them when you’re mortgage free and you’ll receive a nice discount from your insurance company.
just take the win.
Ask about occupational discounts
People in certain jobs or positions are eligible for price reductions, sometimes as much as 5-10%.
list includes: government workers, college students, teachers, retirees, accountants, lawyers, engineers, and more.
don’t confuse market price with rebuild cost
When insuring your home, it’s crucial that you insure it for the cost of construction (or reconstruction), not the cost of sale.
In other words, when you request an estimate, forget the market value of your home.
Consider what it would cost to completely rebuild if it burned to the ground.
let’s take a house on l’Île-perrot, facing the island of montreal, to the west.
The house cost $400,000 to build, including labor and materials.
In that location, I estimate the house would sell for about the same price.
now take that same house and place it in summit circle in upper westmount, one of the most affluent neighborhoods in canada.
up there, I’d be willing to bet it could sell for over $2,000,000.
If you’ve ever taken a walk or driven there, you’ll understand why.
In this example, you would want to insure the building for $400,000 no matter where it is located and what its real estate value is.
Because regardless of your location and market price, the cost to rebuild remains the same!
Knowing that, your next question might be…
How much home insurance do I need?
Now you know your home should be insured for its cost of reconstruction, not its market value.
but how the hell are you supposed to know its cost to rebuild?
You did not create it!
valid question, but not something to worry about.
The responsibility is not yours, the client, to arrive at a reconstruction cost, that is the insurance company’s.
Insurance companies have internal tools to help them determine these types of numbers.
You will be asked certain questions and it is simply up to you to provide accurate data.
The insurance company will need to know:
- square footage (of house, not land)
- how many bathrooms?
- siding material: brick, aluminum, wood, or stone.</li
square footage is by far the most important point.
be diligent in providing the correct number of square feet to your insurance provider.
check it twice. check it three times.
While an error in the number of bathrooms won’t make much of a difference, an error in square footage will affect your price.
You’re probably also wondering how much you should secure your content.
The insurance company will do this for you. they will estimate the value of its contents by determining a cost to rebuild and then doubling it.
That’s the way it is!
This is the system that Quebec’s insurance regulators have devised.
All home insurance policies follow this standard procedure and automatically include coverage for these four things:
- construction – the cost of rebuilding the structure itself.
- additional living expenses – example: if in case of claim you need to stay in a hotel.
- content – clothing, television, furniture, etc.
- separate private structures – such as a shed or garage.
Quebec home insurance coverage is standardized in this way.
From their perspective, getting the square footage right is the most important thing.
how to get cheap home insurance quotes in quebec
When it comes to getting a cheap quote, it often comes down to common sense.
Don’t overthink it: follow these four steps to get the best quote possible.
if this is your first time buying home insurance, check out our simple guide to quebec home insurance as a first time buyer.
Do homeowners insurance claims affect my premium?
A claim is a claim, so unlike auto insurance, where responsible claims affect your premium more than non-responsible accidents, each claim will affect your home insurance premium equally.
As you know, a record of frequent claims (especially small ones) makes you unattractive to insurance companies.
But that’s especially true when it comes to water-related claims.
Two such claims in a three-year period, for example, will make it difficult for you to find water + flood coverage.
Remember: Home insurance should not be treated like a maintenance package.
should be the last resort.
It is your responsibility to be proactive in preventing incidents that could result in a claim.
Here are some things you can do to prevent water damage in particular:
- install a sump pump (with battery backup)
- install a check valve
- install a french drain
- install an alarm water sensor with automatic water shut-off valve
The best way to keep insurance costs down is to avoid claims.
and the best way to do that is to get ahead of problems.
Pro Tip: If your home or cottage will be vacant for more than 30 consecutive days, be sure to let your broker know so they can add a vacant home insurance endorsement.
how to find the best home insurance in quebec
that depends on how you define “better”.
Do you only care about price or are other factors important to you?
Here are some options you might consider “better” depending on the mindset that applies to you.
I want to speak to the same person every time I call: go to a family-owned store with few staff.
They’re not as common as they used to be, but they’re still around.
I want to do this online: consider the sonnet. have been providing 100% online insurance since 2016.
I just want an answer!: try kbd, your west island insurance broker in montreal.
also, univesta insurance or industrial alliance.
Of course, there are consumer reviews that can tell us which companies people are happiest working with.
Have you heard about the personal?
received the highest satisfaction score from j.d. power study 2018.
They are also a subsidiary of Desjardins.
However, to obtain insurance from them, you must be part of a professional order (such as an engineer or accountant).
offer a “group insurance”.
For example, everyone who works at Bombardier can purchase insurance through staff at discounted prices.
No matter who you go with, be sure to follow at least some of our tips to get the best possible quote, lower your insurance costs, and avoid claims.
oh, and avoid those damn potholes.