Protecting Your Realty Investments in 2021

*This post is sponsored by one of The Real Estate Investment Network’s Trusted PartnersPark Insurance. To become a contributing editor or to learn about our sponsorship opportunities, please contact us at [email protected].

No matter where you live in Canada, or who your insurance provider is, the fact remains: prices went up. Sometimes dramatically. 


The simple answer is that the insurance industry is experiencing a “hard market”. A hard market is when the demand for insurance is high and at the same time it’s harder to find coverage.  

Have your insurance costs doubled in the past year?

You are not alone. Blame it on the hard market

Why is less coverage available? Is there relief? 

Insurers’ Response to a Hard Market

The response of insurance companies to a hard market is not about protecting profits. Rather, they need to ensure that they are financially secure enough to protect their clients—you—when you file a claim. 

Several factors contribute to a hard market. For example, when there is a higher prevalence of insurance fraud (claimants inflate their claims), insurers need to compensate for the higher cost of these claims. Insurers have also been hit with lower investment returns and rising inflation. This means that their revenues decline, and premiums go up to cover costs of current and future claims. However, the biggest contributor to a hard market is the increased frequency and severity of extreme weather events and catastrophes (floods, forest fires, hail, water damage claims in multi-unit housing, etc.) The losses are in the billions. In response, insurance companies have become much more stringent in the properties they choose to insure. In some cases, they decline coverage for certain types of properties all together. 

Relief for Costly Realty Insurance 

Strategy No. 1: Choose an insurance broker who does investment property insurance every day, all day. Insuring investment properties are not the same as insuring personal residences. Get an experienced expert on your side. They will save you time and money, and they will be there at crunch time—at claims time. 

Strategy No. 2: Never settle for “it’s good enough” or “it’s cheap” or “I’ll never need it” philosophies. You wouldn’t cheap-out on your pacemaker so don’t do it on your realty insurance. Rather, wisely choose value—adequate, tailored coverage at a fair price.

Strategy No. 3: The year 2020 taught us many lessons. One of the important ones is to expect the unexpected.

Health crises, extreme weather, cyber-attacks, economic shutdowns, sociopolitical unrest—it all happened on our soil in one single year. At this point, if a monster invaded our city, no one would be surprised. 

Choose your coverage carefully so you are protected against the nasty surprises—inadequate coverage at claims time. Adding policy riders after-the-fact does nothing to recover losses sustained.

Check out the extensive types of coverage available to The Real Estate Investment Network members here.  

Don’t Cheap-out on Your Asset Protection

Choosing protection for your realty assets is probably the most important decision you will make. You put plenty of time and research into selecting your investment properties. Protecting your carefully selected properties demands the same kind of time and research.

Questions? Want a quote? Connect with us at your convenience online, by email ([email protected]), or at: (604) 659-3130 or toll-free 1-800-663-3739.

Chris Westrop is the Vice President of Commercial Lines at Park Insurance. He has over 25 years of experience in the commercial insurance business and is a Chartered Insurance Professional with the Insurance Institute of Canada and a member of the Professional Liability Underwriting Society. He is also a REIN member and a regular attendee of many of our programs. He may be reached at (604) 659-3133 or [email protected]

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