6 Ways to Reduce the Impact of Inflation On Your Insurance Premiums

Inflation in Canada has reached recording-breaking levels not seen in nearly forty years. The impact can be felt in all aspects of our lives, and insurance rates are no exception. 
Categories: Business Insurance
Jul 21st, 2022 | By: CapriCMW

Inflation in Canada has reached recording-breaking levels not seen in nearly forty years, and Canadians are feeling the impact in all aspects of life. 

According to Statistics Canada data released in May 2022, cost increases have been particularly dramatic in:

  • Transportation (driven by surges in gas prices that neared 50%)
  • Food (grocery prices have risen nearly 10%)
  • Housing (up 7.4% as mortgage rates continue increasing)
  • Services (up 5.2% with accommodations up 40.2% as travel demand resume to prepandemic levels)

Economists at TD Bank are expecting inflation to remain elevated through the remainder of 2022. What does this mean for us looking ahead?

RENT AND MORTGAGE RATES
It is expected that rent and mortgage rates will continue climbing although this will be balanced against housing prices declining.

HOME RENOVATIONS, REPAIR AND REBUILDING
The pandemic induced a spike in spending on home renovation projects as workplaces worldwide shifted towards working remotely. Meanwhile, the frequency and severity of extreme weather events has driven demand for rebuilding/repairing damaged properties. Combine these factors with ongoing supply chain issues and labour shortages, as well as surging costs of building materials, construction is more expensive than ever and projects are taking longer than before.

VEHICLE REPAIRS/REPLACEMENT
Prices for vehicles, both used and new, have gone up in the past year along with cost of parts; couple these factors with global supply chain issues and computer chip storages, the cost of vehicle repairs and replacement is also higher.

INSURANCE PREMIUMS
Insurance companies will adjust insurance premiums in response to rising inflation. However, there are signs
relief is in sight. Read Canadian Broker Network’s Spring 2022 Insights Report for detailed information.

So what can you do to reduce the impact of inflation on your insurance?

HIRE A PROFESSIONAL APPRAISER
Get a professional appraisal done to accurately value the replacement cost of your assets.

TALK TO YOUR INSURANCE BROKER
Your broker should guide you through the appraisal process, explain your coverage limits and identify any coverage gaps.

UPDATE YOUR POLICY
Your insurance policies should be updated to ensure you are insured for the correct property values. 

OPTIMIZE YOUR RISK PROFILE
Minimize and manage your exposures to remain a low-risk client for insurance companies.

INVEST IN RISK MANAGEMENT
Avoid claims altogether by implementing risk management practices and regularly maintaining your assets.

GET AHEAD OF YOUR POLICY RENEWAL
Begin conversations with your insurance broker a few months in advance of your renewal for their guidance and advice on getting prepared.

 This content is powered by the Canadian Broker Network.

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CapriCMW is a proud member of the Canadian Broker Network (CBN), an alliance of Canada’s leading independent insurance brokerages representing over 50 offices, 1,500 professionals and over $1 billion in premiums. Learn more at canadianbrokernetwork.com.

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