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View of a Calgary or Edmonton cal-de-sac with large, nice, new-build homes, each with a 2-car garage. The garbage and recycling containers are on the curb

7 Uncontrollable Factors Affecting Home Insurance Rates

Factors affecting home insurance rates include those that determine the likelihood of damage to your home and the cost to repair or replace your home. Some of these factors are manageable by you but others are entirely out of your control. Unfortunately, many people don’t know what factors affect home insurance premiums and this results in a lot of frustration when there is an increase in their insurance bill. This is especially true if they’ve been claim-free for years. So what affects your home insurance rates? First, we’ll look at what individual factors are affecting your home insurance rates and then we’ll review the ones you have no control over.

Personal Factors Affecting Home Insurance Rates

  • How much your home and your belongings cost
  • What your deductible is
  • What your coverage options are
  • Your insurance history and claims history
  • Any remodels or upgrades done to your home
  • High-risk features, like pools, wood stoves, and trampolines

These factors can affect your home insurance rates positively or negatively. for example, if your home is older, it may cost more to insure as the wiring or plumbing may be more likely to fail and cause damage. On the other hand, an upgrade could increase the cost of replacement for your home. It’s a complicated formula, that’s for sure.

Uncontrollable Factors Affecting Home Insurance Rates

While you can control some factors affecting your home insurance rates, others are out of your hands (unless you move).

1. Frequency of Natural Disasters

Alberta has experienced a string of natural disasters over the last few years and these are likely reflected in your latest home insurance renewal. Between the 2016 Fort McMurray fires and the 2013 floods across the southern areas of the province, Alberta experienced a blow of $14 billion dollars in damages. The frequency of these natural disasters impacts your insurance rates, as the more at risk your location is for such events, the more expensive insurance will be. With the number and severity of these natural disasters increasing, it is likely that insurance costs will continue to rise.

2. Insurance Fraud

Insurance fraud occurs when a home insurance policy owner deliberately makes a claim that is exaggerated or misleading. A few situations that would count as fraud include:

  • Deliberately damaging property to make a claim
  • Exaggerating the cost of items stolen in a burglary
  • Constructing fake receipts or repair bills
  • Lying about commercial or rental usage for a property
  • Overstating the severity of the damage
  • Failing to disclose the true circumstances of the damage

An increase in the frequency of fraud has put a considerable amount of pressure on insurance companies and prompted an increase in rates.


3. Labour and Building Material Costs

The cost to repair your home is tied in with labour and material costs. Unfortunately, these follow the cycle of supply and demand which means they can fluctuate. If your area has been hit with a natural disaster, your insurance company could be paying much higher costs than if your home was the only one damaged by a fire.

4. The Frequency and Severity of Claims in Your Area

We know that when you make a lot of claims, your insurance premiums may be higher as a result. On the other hand, should you be claims free or have very few claims you will likely have a lower rate. But this also applies to people living in your area. If there are a lot of claims for weather-related damage or theft, your insurer will probably interpret this as meaning your area is higher risk and will potentially increase your premiums.

5. Your Home’s Proximity to Risks

Where your home is located is a key factor affecting home insurance rates. Proximity to risks such as rivers and cliffs will may your home more expensive to insure.

6. How Old Your Home Is

Your home’s age determines many of its risk factors. An older home often has wear and tear, which can increase its chance of damage. It also often has outdated plumbing or electrical systems. Upgrades can help reduce insurance costs and make your home more efficient and safer to live in. Talk to your broker about your options if you have an older home.

7. You Home’s Distance from Fire Services

The farther your home is from a fire station or fire hydrant, the higher your insurance premiums will be. That’s because when it comes to fire, time is of the essence. If a fire station is nearby, crews can get to your home quickly. If there’s a fire hydrant, they’ll have the resources to fight the flames. If they take a while to get to you or don’t have access to water, their ability to save your home is impaired.


If you have any questions about factors affecting home insurance rates, your home insurance broker can help. They can also help you save money on your home insurance premiums and get the best coverage for your needs at a competitive price.


Understanding Uncontrollable Factors That Impact Insurance Rates:

When it comes to insurance rates for condos, tenants, and homeowners, various uncontrollable factors can have a significant impact. These factors extend beyond your control but can influence the cost of your insurance premiums.

For Condo Insurance: The location of your condo can play a crucial role. If your condo is situated in an area prone to natural disasters or has a higher crime rate, you may expect higher insurance rates. The age of the condo building and the condition of its infrastructure can also be determining factors.

For Tenant Insurance: Similar to condo insurance, the location of your rental property can affect your rates. High-crime areas or regions prone to natural disasters may result in higher premiums. Additionally, the age and condition of the property can play a role in determining the cost of tenant insurance.

For Home Insurance: Uncontrollable factors such as the location of your home can significantly influence your insurance rates. High-crime neighborhoods or regions prone to specific natural disasters may lead to increased premiums. The age and condition of your home, along with its proximity to emergency services, can also impact your rates.

When seeking home insurance quotes in Red Deer, Sharp Insurance’s expert brokers can assist you in finding the most suitable coverage tailored to your specific needs.


While these factors may be beyond your control, working with experienced insurance brokers like Sharp Insurance can help you find the most suitable coverage at competitive rates, ensuring your peace of mind in any location.