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Ontario: 40% Increase in Home Insurance Premiums Despite Perfect Claims Record

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  • Aug 5th, 2019 10:19 am
Jr. Member
Apr 8, 2013
179 posts

Ontario: 40% Increase in Home Insurance Premiums Despite Perfect Claims Record

My elderly relative in the west Toronto was notified by her broker that she’s facing a 40% increase in her home insurance premiums despite the fact she’s never made a claim in over 25 years. She lives in a decent part of the city with relatively low crime rates. For liability purposes, I won’t name the insurance company. However, it’s one of the larger home insurance companies in Ontario and is not affiliated with a bank.

Unfortunately, our hands are tied because the relative only has 60 amp service and we can’t change insurance companies without upgrading to 100 amp. Our relative will be selling the property within the next couple of years (most likely to a builder) as such we won’t be able to re-coup much of the $2,200 to upgrade to 100 am service.

Here’s the kicker: I asked the broker if we could reduce the value of the contents and was advised that the insurer automatically fixes the value at 75% of the replacement cost of the building, placing the value of the contents at $350,000. I advised the broker that this needed to be adjusted to a maximum of $125,000 as the basement of her bungalow is empty and she doesn’t have anything of significant value in the home.

Our broker’s response was that the insurance company doesn’t have the ability to reduce the contents value. My next question was “do we not have to demonstrate the replacement value of the contents in the event of the claim?” No response.

So in other words, the insurance company is increasing my relative’s insurance premiums by 40% but at the same time is charging us premiums for content values that we could never come close to substantiating!

If only there was a reputable insurance company out there that doesn’t play these types of games!
8 replies
Mar 31, 2013
266 posts
Courtenay, BC
check out other companies, even the online ones such as Sonnet......I had a bitch of a time finding someone to insure an older mobile home here in BC that I rent to the kids, Sonnet was by far the easiest and cheapest......
Deal Expert
User avatar
Feb 11, 2007
18966 posts
Get a new broker. That one sounds like a moron. Or work directly with the insurance company.
I'm surprised that 100amp service is required to be insured. Are you sure about that or is that what the broker is telling you?
If the women don't find you handsome, they should at least find you handy.
Deal Addict
Feb 19, 2019
1640 posts
Stouffville ON
Speak to someone else and see if there is a better solution, the link below claims that the broker deals with number of high risk insurers (assuming the term applies here).
https://www.thinkinsure.ca/high-risk-in ... quotes.php

I don't know the above broker, nor I am recommending them, just think that the second opinion is needed.
In addition to contacting a broker try contacting some companies directly and see if they offer coverage for your situation (Sonnet, TD, Belair tend to have good prices)
Full Time and Full Service Realtor
Deal Fanatic
User avatar
Sep 8, 2007
9225 posts
Way Out of GTA
engineered wrote: Get a new broker. That one sounds like a moron. Or work directly with the insurance company.
I'm surprised that 100amp service is required to be insured. Are you sure about that or is that what the broker is telling you?
Yes, the 60amp to 100amp requirement is almost a given now unless grandfathered. I do however find this ridiculous given that some older small houses that are on gas dryers and gas stove and without AC, are pretty much ok with a 60 amp. Tough situation as it’s a knock down and like OP said not likely to recoup to upgrade charges. What has likely happened as they have reclassed the house as high risk given the 60 amp service.

But I’d see if there’s a way for a new insurance company to insure it with an updated ESA inspection. I was able to get insurance on a house in 2015 that had some aluminum wiring in it with an ESA.
Deal Expert
Aug 22, 2011
37240 posts
Center of Universe
Useless broker...
Instead of shopping for better rates, he/she simply tells your folks to accept the increase?

Drop the middleman and start calling around or getting online quotes as a reference point.
Jr. Member
Apr 8, 2013
179 posts
Yes, most insurance companies have made it mandatory in Ontario for the past 20 years that you upgrade your service when purchasing a home with 60 amp service.

My first question to the broker was help me understand why such a large increase in the premiums. She couldn’t provide an answer other than this was the price quoted by the underwriters. This raised alarm bells because if the insurer’s unwilling to provide a legitimate explanation then what will they be like in the event of a claim?

There’s three important aspects to insurance; the price, the coverage and most importantly the reputation of the insurer. Insurance policies are pretty worthless if the insurers refuse to stand behind you in the event of a claim. Unless your home’s fully destroyed you can end up spending more in legal fees pursuing the less reputable companies than the claim’s worth.

Then I asked the broker if she could find an alternative insurer but it was important that she notified any new companies that my relative still had 60 amp service. You need to disclose everything to the insurance companies otherwise they’ll use it as an excuse to deny a future claim.

To the brokers credit she obtained a quote from another insurer at her existing rate (around $1K per year) but it was conditional upon my relative upgrading her service. We offered to send copies of my relative’s hydro bills showing the significantly below average hydro consumption for the past year but she advised us that it was pointless.

Insurance companies should realize that there’s a cost associated with playing games like this. I’ll never deal with this company again if I can avoid it and will warn my friends and other family members to do the same.
Deal Fanatic
Nov 22, 2015
6491 posts
I don't see what the problem is. If no one else will insure her without that upgrade, why should her current insurer continue to take on the risk without increasing her premiums?

I don't think they care if you switch insurers and they aren't "playing games"... Just getting rid of high-risk/low-profit customers.
Jan 19, 2014
38 posts
The contents on every home policy I've seen are a fixed percentage of the rebuild cost. This is so you don't have to add up everything you own and keep a running tally. It's a handy package, and doesn't increase the cost of your insurance. You could ask the broker to look for a basic or fire and extended coverage policy, those don't have contents included. But if you're adding 125,000 contents it'll probably cost just as much for less coverage.

She can be pretty stuck with 60 amp service. Ways to lower her current policy would be to increase her deductible and also see if that company offers a credit check discount. Her deductible should be 1,000 or 2,500 if she's comfortable with that. Another thing to ask the broker to do is update the home evaluation, insurance companies ask for it every 5 years, but in between they raise the value 3 or 5 percent a year to adjust for inflation. On a 500,000 home that can really add up faster than inflation. You could also check if it's a comprehensive or broad policy, broad gives same coverage on the home (less perils coverage on contents) and costs a couple hundred less.

Another discount she may be eligible for would be monitored alarm so if she has an alarm get a copy of the certificate to the broker. And make sure the broker has her birthdate if she isn't receiving a mature discount.