Insurance premiums for property owners continue to rise. Annual increases vary between 10% and 35% over some years for certain types of buildings.
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The Property Owners Corporation of Quebec (CORPIQ) reports that more members are deciding to reduce their coverage and increase their base deductible to lower costs.
So employers pay more for their insurance with less attractive coverage, according to CORPIQ.
“It’s a real headache for all landlords and at all levels,” says Marc-André Plante, director of public affairs and government relations at CORPIQ.
The increase in insurance premiums can be attributed to many factors such as the increase in the value of the real estate portfolio, the concept of replacement when events occur, but also the cost of materials and labor conditions.
An increase in premiums for insurance will affect the amount of tenants’ rent.
“The unfortunate thing is that it also contributes to the increase in rents, because in Quebec, the Administrative Housing Tribunal recognizes 100% of the increase in insurance premiums in the annual increase in housing costs. So in 2023, renters, in 2023, will cost more to find accommodation, and this is mainly due to the increase in insurance premiums,” said Mr. Plante.
According to CORPIQ, the expected average increase in rents next year varies between 3% and 4%. Increases in municipal taxes and costs in general also explain the increase, along with insurance premiums.
The issue of insurance premiums brings some reflection to CORPIQ.
“Today we have matured, first of all we have to ask ourselves what is the service offer we want to get in the real estate sector. “Negotiations must be made with the Insurance Bureau of Canada to find a happy medium of insurance premiums and ensure that this cost is affordable for both owners and renters”, explains Mr. Plante.