Home insurance rates jump 36% in 36 months in New Brunswick

The cost of insuring a home in New Brunswick jumped 2.5 per cent in March, continuing a three-year-long escalation in prices that has come despite declining property values in many parts of the province.

The latest increase means home insurance costs have jumped 36 per cent in New Brunswick in the last 36 months, according to Statistics Canada's consumer price index.

That's nearly double the national increase of 18.7 per cent during the same period.  

Quispamsis resident Mike Cole says his insurance company raised rates on his house this year, especially for sewer backup and water damage caused by roof leaks. He cancelled coverage on both.

"They flat out said claims were way up," said Cole. "I cancelled the rider on my policy. I was just not going to pay that much."

Overall, the cost of home insurance has jumped 98 per cent in New Brunswick since 2002 — quadruple the overall inflation rate.

New Brunswick's consumer advocate for insurance, Ronald Godin, says it is increasingly becoming an issue for consumers who call his office.

"We're getting calls about premiums going up and about trouble obtaining coverage for a reasonable premium," said Godin. "We have noticed that in the last couple of years."

House insurance, unlike car insurance, is not regulated by the province and companies are free to charge rates they see fit.

Fredericton insurance lawyer Erika MacDonald says damage from flooding, ice storms and other severe weather events, such as post-tropical storm Arthur last summer, are likely behind the increases.

"When people make additional claims [insurance companies] have to increase premiums accordingly, and events such as [Arthur] perhaps lent to the increase in premiums," said MacDonald. 

Home insurance premiums in Nova Scotia have increased a similar amount to New Brunswick over the last three years — 37 per cent. But rates in neighbouring P.E.I. have increased by only 14.3 per cent.

The Insurance Bureau of Canada (IBC) says home insurance claims in New Brunswick totalled $698.5 million over the last five years, up $127 million over the previous five years.

IBC's Atlantic vice-president Amanda Dean says water damage has surpassed fire damage as the largest problem, with severe weather events driving up the number of floods, sewage backups and roof leaks.

"Right across the board severe weather and water creeping into homes is definitely something we're seeing," said Dean.

Three years ago during a speech in Saint John, IBC president Don Forgeron criticized New Brunswick for allowing too much development inside flood plains and wetlands, predicting it would cause trouble as severe weather events, caused by climate change, increased.

"For far too long we've allowed construction in areas we just shouldn't and with what we know today, I do think this is an area governments need to take a serious look [at]," Forgeron said.