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Will the average home insurance cost go up because of COVID-19?

August 28, 2020 Erin Pepler
Will the average home insurance cost go up because of COVID-19?

Three homes shown with pointed roofs

Photo by Jeffrey Czum from Pexels

What does home insurance have to do with the pandemic? Canadians have been spending more time at home as a result of the COVID-19 pandemic, and that’s a good thing–we’re all trying to stop the spread of the coronavirus and get back to life as we knew it. However, all of that extra time in our houses has led to an unexpected consequence for some families.

The Ontario Fire Marshal reports that between January 1 and May 4, 2020, there were 51 fire-related fatalities in Ontario—a 65% increase in comparison to the same timeframe last year. While there were a variety of factors behind these incidents, unattended cooking is a leading cause of residential fires. With restaurants feeling the negative effects of the pandemic, and more people working remotely or out of work due to the pandemic, cooking at home (while working and/or watching the kids) could be a reason for the increase.

The above is a troubling statistic for a number of reasons, most notably the tragic loss of life. From a financial perspective, this increase in residential fires may have some wondering if home insurance rates might go up in an already challenging time. A notable increase in house fires would presumably result in an increase in claims, which could have a ripple effect within the insurance industry. Just like how people driving less resulted in lower auto insurance rates for some drivers.

Interestingly, none of the insurance specialists we spoke with report seeing an impact.

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It’s not the coronavirus that may cause home insurance rates to rise

Your partner may or may not agree, but your cooking isn’t the problem, suggest some insurance experts. In fact, the time you’re spending at home won’t likely be the reason for an increase. It’s what’s outside your windows that could be the culprit.

“The severity of weather is going to be the reason rates increase in the next couple of years,” explains insurance broker Peter John Van Dyk, partner at PV&V Insurance Centre in Burlington, Ont., and Meester Insurance Centre in Smithville, Ont. Van Dyk hasn’t seen a dramatic increase in either the frequency of fire-related claims or the severity of fire-related incidents in recent months, and references flooding as a more common issue—a sentiment that was echoed by several other professionals we spoke with.

It’s possible that these recent fires have been so spread out across the province that no one region has been dramatically impacted. “There doesn’t seem to be any blatantly obvious observable patterns with respect to the geographic distribution of fatal fires,” confirms Ryan Betts from the Office of the Fire Marshal & Emergency Management.

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