Why Alberta has seen some of the biggest jumps in home insurance premiums

[00:00:01]Many Albertans are very familiar with extreme weather events from hailstorms to wildfires. As a result, they're paying the largest increase in homeowners insurance premiums in the country. That's outlined in a recent Statistics Canada report. It shows that in this 5-year period, rates in Alberta jumped by a little more than 55%.

[00:00:21]The national average increased by nearly 40%. It points to 2024 as the costliest year on record for extreme weather claims. This 2024 Calgary hailstorm costing $3 billion along with the Jasper wildfire pricing around 1.3 billion in claims. Insurers say companies must collect enough premiums to remain sustainable and profitable.

[00:00:43]>> The issue we get into is that specific areas of Calgary for example in the northeast and the northwest where they're more in a hail belt, we can't just jack premiums up on those specific houses cuz it would be completely unaffordable. So, the principle behind insurance is of course the losses of a few get spread out amongst the many. So, when we do have these cat losses due to severe weather change in climate, everybody feels it.

[00:01:06]>> One solution to reduce premiums is making homes more resilient to extreme weather. But, some experts say homeowners see it as costly.

[00:01:13]>> The homes that we build in Canada are quite good. They're some of the best in the world.

[00:01:18]Uh but, they are being damaged by severe weather events and uh we know how to build homes a little bit better so that they're not as uh as uh uh vulnerable to these events.

[00:01:29]>> Meanwhile, in Jasper, the municipality says nearly a third of the owners who lost homes are still tied up in insurance claims nearly 2 years after the wildfire. And extreme weather events can be an eye-opener beyond premiums.

[00:01:42]>> And what people sometimes don't take the time to understand is the the details of their policy itself and what would be covered in the event of a of a a single home fire for example or a catastrophic event like we had in Jasper.

[00:01:57]And that's where I think insurance literacy is such a critical gap in in the country.

[00:02:03]>> The Alberta government confirms it's focused on this issue with a working group exploring options to reduce property insurance costs, as well as finding ways to improve home resilience.

[00:02:13]Travis McEwan, CBC News, Edmonton.