Insurance companies are starting to see profits after several years of disastrous results. Maybe now we consumers will start to save money on our insurance.
“The 2021 industry combined ratio was 85.2%,” PACICC chief economist Grant Kelly and research assistant Zhe (Judy) Peng write in the latest Solvency Matters quarterly report, released Wednesday. “This is the lowest combined ratio ever recorded by Canada’s insurance industry, beating the previous best of 87.5% recorded in 2006.”
Not so fast!
Inflation – that ugly word we all hate. You ask, how on earth could inflation affect insurance rates?
Here’s a few reasons why we won’t be seeing much rate relief.
The CPI (Consumer Price Index) is at 5.7% which is close to a 30-year high. That means costs to us are increasing.
- Labour costs are on the rise due to one of the lowest unemployment rates Canada has seen in many years.
- The supply chain disruptions have led to limits in production which means higher costs.
- Consumer demand has also driven prices up – the standard supply and demand curve.
- Prices for new and used vehicles has increased and repair costs are also on the rise.
What can you do?
There are several ways you can save money on your insurance. Here are three of them!
Review the values on your property
With costs rising, you must increase the amount of insurance to reflect those costs. Most policies provide replacement cost coverage which means if you replace the property or your contents that have been destroyed you will be compensated accordingly. If you don’t review your values, you may find yourself under-insured. Coinsurance Penalties Yes, you may pay a bit more in premium but you could save thousands of dollars in the event of a claim.
Practice loss prevention.
Having a loss is not fun. It creates stress, loss of income, impacts the time you have to spend on your business. Many of those costs are recovered because of your insurance however you will not be covered for your stress or your time. For more information check out some of the recommendations at the Insurance Bureau of Canada Risk Management and Loss Prevention For more information, please reach out to heather@thinkinsure.ca
Save money on your insurance premiums
You will notice that I put this last. Many consumers say they want to save money on their insurance and that becomes their first priority. However, if you haven’t completed steps one and two, you are putting yourself at risk. Speak to me about how implementing loss control measures, increasing deductibles and self-insuring might help you save money on your premiums. Reducing Premiums not Protection
Your insurance protection needs to keep pace with the changes – economic, political, competitive and insurance company results. An annual review with a qualified insurance professional should be part of your business plan.
For more information and a no-obligation, no-pressure review, please reach out. I’m always happy to provide information to help you and your business survive in the event of a loss.
