High home insurance premiums leave families opting out

Consumer advocate sees 20 per cent spike in complaints about home insurance

New Brunswick’s consumer advocate for insurance says a growing number of people are struggling to pay their home insurance premiums, which are unregulated in the province.
Sharon Pitre is among a growing number of homeowners who are finding it difficult to pay for their house insurance premiums.
Pitre said she was forced to cancel the insurance on her Canaan Station home because of those skyrocketing bills.
“I don’t want to lose everything we’ve got,” Pitre said.
“In a fire, it’s gone.”
Pitre paid $480 the first time she bought home insurance and that bill jumped to $780 the next year. In subsequent years, her premiums shot up to more than $1,000 and then between $1,300 and $1,400 a year.
When Pitre shopped around, she received quotes between $1,800 and $2,200 to insure her home.
Pitre is not the only person in New Brunswick witnessing soaring home insurance rates.
Ronald Godin, the province's consumer advocate for insurance, said there’s nothing in place to curtail rising premiums for home insurance.
Of the 1,600 consumer complaints filed with the provincial agency last year, 429 related specifically to home insurance. That's an increase of 20 per cent over previous years, according to Godin.
“It's either that their premium has increased substantially or they are finding it difficult to find insurance,” Godin said.

Advocate criticizes use of credit scores

About half of the 40 insurance companies operating in New Brunswick are still using customers' credit scores to set higher premiums, Godin said.
He said this practice is costing people a lot of money.
“The worse your credit score, the higher the premium,” he said.
“At one point in time if your credit score is really bad, they will simply refuse to take you as a client or refuse to renew you.”
Godin said it’s time to halt companies from the ability to use credit scores to set premiums.
“That’s sort of kicking someone that’s down already,” he said.
Godin said he wants the provincial government to step in and ban the use of credit scores to better regulate pricing.
The New Brunswick government established the consumer advocate for insurance in 2005 as a part of a series of insurance reforms created in the wake of skyrocketing automobile insurance premiums.
Bernard Lord's Progressive Conservative government narrowly won the 2003 election and it is believed the Tories lost many of their seats because of their inability to tackle the insurance file.
Automobile insurance rates must be reviewed by the New Brunswick Insurance Board and companies must prove their premiums are "just and reasonable."
Home insurance premiums are not subject to the same regulation.