Fredericton, April 17, 2006 – The Insurance Bureau of Canada (IBC) responded recently to reports about homeowner’s insurance in New Brunswick.
Contrary to what was implied in a recent CBC report, the price of homeowner’s insurance is unrelated to other lines of insurance, says the IBC. Each line stands on its own. New Brunswickers also deserve to know, says IBC, that comments in the CBC report attributed to an official from Statistics Canada were taken from an interview conducted more than a year ago.
“We believe it’s irresponsible to present year-old comments as news, and that New Brunswickers deserve to know the current facts,” said Don Forgeron, Vice-President, Atlantic, Insurance Bureau of Canada. “Our data show a decline in homeowner’s premiums in New Brunswick. In 2004, the average premium was $358. For 2005, it was $340.”
He added: “Homeowner’s insurance pricing is more complicated than just average premiums.”
Homeowner’s pricing is looked at in terms of premium per $1,000 of coverage. In 2004, New Brunswick homeowners paid, on average, $2.70 of premium for every $1,000 in coverage. In 2005, they paid, on average, $2.32 per $1,000 worth of coverage, a reduction of 17.7%. This is at about 2001 levels, when the average price was $2.33 per $1,000 of coverage.
At the same time, the average size of policy has gone up. Due to increased building costs and content replacement costs, the average amount of coverage has gone from $133,000 in 2004 to $146,000 in 2005.
“In other words, people are buying more insurance, but the price per unit ($2.32 of premium per $1,000 of coverage) has gone down. The net effect, on average, has been a decline in what most people are paying. But some New Brunswickers may be paying more because the cost to rebuild their homes, or to replace their belongings, has gone up.”
The price trend of homeowner’s insurance in recent years compares very favourably with other costs related to home ownership. According to Statistics Canada, home replacement costs in New Brunswick have risen by 12.1% since 2001. New housing prices have gone up 12.3%, and maintenance and repair costs have gone up 10.2%.
Insurance Bureau of Canada is the national trade association of the private property and casualty insurance industry. It represents more than 90% of the non-government home, car and business insurance in Canada. For more information, visit IBC’s Web site at www.ibc.ca.