Condo insurance: 88% increase over two years after one claim. Normal?

[moustafahasan]

Hi everyone. For 2022 I was paying $26/month for insurance on my 650 square-foot condo. We had a water damage claim due to water backing up in the condo's pipes (not our fault), so I was expecting a price increase. For 2023 our price was $35/month, which is a ~35% increase. Fine, I thought, since we recently had a claim.

However, our policy is now coming up for renewal, and the 2024 monthly rate is $49/month, which is an 88% increase over a two-year period which included one small claim.

Does this sound like a reasonable increase? Am I missing something like perhaps the 2022 starting point rate was just way too low? Any insight would be much appreciated. TIA

 

[echo2788]

@moustafahasan The amount of the claim doesn’t matter.

 

[moustafahasan]

@jesusislord007 Thank you for the detailed response. This is very informative and helps me form my opinion. It's tough to understand the almost doubling in price when the agent on the phone simply says it's based on the underwriters' rates without any additional context - your response helps provide more context.

I am in Ontario, if you are curious.

 

[jesusislord007]

@moustafahasan I will be honest the agent likely has no clue. They may understand how recent claim surcharges work, but when presented with "my price nearly doubled in two years" and all they just know there is a 20% surcharge? Most aren't equipped to handle that.

It is also entirely possible the company does not tell them what happens when a claim is made. That would be unfortunate, but once the systems are more complex than +X% for Y years type thing, there is less faith in an agent ability able to accurately explain it; which in itself causes a lot of problems.

As for Ontario, my direct experience with that market is more historic, but I'm fairly confident each price driver impacting us here is also driving additional rate across Canada. The caveat being it might be less extreme for #3.