Commercial Insurance Program update 2020
Average 13% rate increase for 2020 renewal
Across Canada, property insurers are facing challenging times and rates across the industry are rising, as are the number and severity of claims. The insurance industry overall has experienced very poor results over the past couple of years and because catastrophic weather losses have been a major contributing factor, due to climate change, this is expected to continue. The commercial insurance market results are the worst they’ve been in the last 18 years and the Insurance Bureau of Canada says that our changing climate is creating weather extremes with more rain, heat, drought and wind.
CHF Canada’s program is no exception to the increasing weather-related claims trend in the industry. There have been several significant large fire losses and large wind/tornado losses in the last year alone, although more frequent smaller fire losses have also occurred. On the positive side, there have been fewer instances of non-weather-related claims, and fewer slip and fall injuries. CHF Canada and The Co‑operators, as partners in your commercial insurance program, continue to work hard to minimize the increases and provide the best coverages possible. Co-ops can make a difference to their premium by implementing a Risk Management Program and checking their units for common risks leading to claims by filling out the risk management checklists we send you (see below for more details).
Premium increase by region
- East – Experience in Eastern Canada was good, which resulted in an overall average premium increase of 6%
- Ontario – Experience in Ontario wasn’t quite as positive, resulting in an overall average premium increase of 14%
- West – Experience in Western Canada had been challenging in the past year but is improving slightly, resulting in an overall average premium increase
The final premium amount you pay is impacted by various factors and could change due to:
- Your co-op’s status in the Qualifier program – Gold (3% credit), Silver (neutral), Bronze (20% surcharge)
- An annual inflation factor, which is applied to make sure your coverage limit keeps up with inflation. For 2020, an inflation factor of 4% will be applied in all regions. If you’ve had a building valuation assessment within the past 18 months, the inflation factor will not apply.
- Your five-year loss ratio may result in a credit or surcharge on your premium.
New Risk Management rating credit this year!
Co‑ops that practise good risk management will see an increased benefit this year. This year, we’ve enhanced the credits to add an additional credit for those co-ops that returned completed 2019 Risk Management checklists to CHF Canada by October 1, 2019—an additional credit of 5% (for a total of 8%) has been added to the Gold status, and a credit of 5% added to the Silver status. It not only pays to keep your co-op safe by checking units for common risks found on the Checklist, but sending it in to CHF Canada also saves you money on your premium!
If you would like to know what status your co-op has achieved, and what it would take to move up to the next level, please contact your Co-operators advisor. (Note: If your co-op is still in the Bronze status, you may be able to move up to Silver simply by providing the renewal information The Co-operators has requested and confirming that all Loss Control recommendations have been addressed. This could be a significant savings on your premium.)
New look to the policy documents
The policy documents will look a little different this year due to The Co-operators’ new policy management system. In addition, co-ops with multiple locations that had previously been grouped together will now be identified separately.
Contents coverage – new minimum coverage
A nominal, minimum contents coverage limit of $50,000 will be applied to every co-op in the program, at no additional charge. Premiums will continue to be based on the actual amount of contents reported to us for each co-op.
Directors and Officers liability coverage
We encourage co‑ops to consider increasing your Directors and Officers liability coverage to ensure you’re covered in the event of a large claims settlement as settlement award amounts are increasing. Limits are now available up to $5 million—call your Co-operators agent if you’re interested in exploring a higher limit.
Still included in the program
Help for small co‑ops
In order to help keep the program fair to everyone, premiums for small co‑ops will again be subject to a separate discount/surcharge table that considers the lower premium those co‑ops pay for insurance. This separate table will continue again this year. Small co‑ops are identified as those with an annual premium of under $4,000 in the Atlantic and $8,000 in the Western regions.
Claims Free Guarantee
If your co‑op has remained claims free for a period of five years or longer, this endorsement will be added to your policy at no additional cost. Co‑ops that have not made any claims in the past five years will continue to qualify for this coverage so that the first time they do make a claim, it’s forgiven and will not count towards their loss ratio or affect their discount or surcharge. So co‑ops should think twice about making small or unnecessary claims and be encouraged to become claims free to take advantage of this unique and important coverage. If you have a second claim within five years, a claims surcharge will apply.
CHF Canada’s Risk Management Program
Continuing our success into 2020
CHF Canada and our partners, The Co‑operators, launched our Risk Management Program two years ago and participation results continue to climb. Your co‑op received everything you need to check your co‑op units for common risks that could cause injury and lead to insurance claims. We also sent you education material to help your members understand the risks that could be present in their everyday lives.
The program had another successful year, with over 160 co-ops representing over 20% of member housing co‑ops participating in our commercial insurance program returning checklists after having inspected inside co-op units. That shows us that a lot of members in our housing co‑ops reduced their risk of claims by answering a few simple questions and making their units (and their co‑ops) safer for themselves and their community. Let’s keep up those numbers!
What’s new for 2020
We will be sending out another checklist early next year to continue to look for common risks in your units. Many questions will be the same as previous years in an effort to integrate a yearly risk management program into the annual calendar of our members, and because risks can change year to year. It is important to check each year for sources of claims that can be prevented, such as water and fire claims, which are frequent and can be expensive. Stay tuned!
New: Saving money!
As you read above, you can now save money on your renewal premium by sending in your completed checklists to CHF Canada. Co-ops that complete the 2020 checklist, address any problems identified and send it in by end of August 30, 2020 will see an added credit to their Qualifier status, which lowers their premium while keeping the co-op safer. Participating in our risk management program and returning your completed checklists will go a long way toward that Gold status and saving your co‑op money!
So watch your email in January for the next risk management program package coming your way.
Why are we doing this?
- To make sure your co‑op’s members are safe! Our Risk Management program is based on our past claims history. Checking for common risks could help
prevent fires, accidents, severe injuries, or massive property damage.
- To prevent risks, which helps lower insurance premiums for everyone in the program. With fewer claims, everyone in the program saves money.
- To save money for your own co‑op! Your insurance premiums are based on your individual co‑op’s loss ratio so if you reduce the number of claims, you
could get a credit on your final invoice.
- If you don’t find and fix the risks in your units, it could impact your insurance coverage.
Who to call for help
You can reach CHF Canada at 1-800-465-2752 or by email at firstname.lastname@example.org if you have any questions once you’ve received your material.
The Co‑operators and CHF Canada have the expertise to help you every step of the way. We are committed to making our co‑ops safer and helping keep your insurance affordable. CHF Canada and The Co‑operators—working together to make sure you’re covered!
Help to cut costs—increase your deductible
One of the ways your co‑op can offset the cost of higher premiums is to raise your deductible. Here’s the deductible savings chart showing the percentage saved on raising to a higher deductible.
|Region||Raise your deductible to||Save on your property rate|
The Co‑operators and you
The Co‑operators representatives are committed to providing quality service to CHF Canada members by arranging a yearly visit with the co‑ops in the program—they will talk about loss prevention, and work through the Qualifying tool that is used to determine whether co‑ops will qualify for the Gold level tier and receive a further discount on their premium. This year it’s even more important to schedule this visit—those co‑ops that do not contact The Co‑operators or book this visit will be placed in the Bronze level tier and could receive a small surcharge on their premium. If your Co‑operators representative is trying to contact you, please call them back and schedule the visit! It just might save you some money.
Loss prevention and annual reviews
When a Loss Control Inspector makes recommendations for loss prevention, please be sure to respond promptly to your Co‑operators representative, to let them know what action has been taken or when you plan to implement the improvements. Please reply and respond to The Co‑operators’ recommendations—otherwise, your coverage or premium could be affected.
Policy renewal documents and 2020 invoice
The Co‑operators will distribute the 2020 renewal documents and invoices directly to the co‑ops starting November 28, 2019.