The COVID-19 pandemic and subsequent rise in remote work has made many Canadians reconsider their living options. In fact, tens of thousands decided to exchange expensive and congested cities for a lower cost of living and better quality of life in smaller towns or rural areas.
Statistics Canada data released earlier this year showed that more than 64,000 people left big cities like Toronto and Montreal for smaller cities or rural areas from mid-2020 to mid-2021, highlighting a 14% increase from the previous 12-month period.
Although many have moved back to city centres, those that are permanently working from home may still find it appealing to move out of the concrete jungle to greener pastures. However, rural areas come with risks that might not be as big of a concern in urban areas. Small towns are not equipped in the same ways cities are to withstand floods, for example, and it can cause considerable damage to homes and communities.
Here are three potential liabilities you should consider from a cost-of-living and home insurance perspective when moving from a big city to a rural area.
1. Environmental risks
Due to environmental risks like flooding, snowstorms, and wildfires, home insurance premiums tend to be higher in rural areas to account for this extra coverage.
For instance, in 2021, the average cost of insurance premiums in the Windsor-Essex region was approximately $2,000 per year, as compared to average premiums between $1,200 and $1,350 in Toronto.
Secondly, and contrary to popular belief, crime rates are actually higher in small towns. This, coupled with the higher likelihood of flooding, contribute to higher home insurance premiums in more rural areas.
How far your home is from a fire hydrant or hall can also impact your insurance premium — the greater the distance, the higher your premium will tend to be, since it will take longer for emergency crews to reach your home, which could mean it sustains more damage.
Some things you can do to mitigate the risk and lower your insurance premium while living in a disaster-prone zone are:
- Elevate the electrical and heating systems to ensure minimal damage during floods.
- Invest in a sump pump, which removes excess water from a basement
- Earthquake retrofit your home to prevent displacement from the foundation.
2. The cost of home insurance
When you move from an urban location to a rural area, your home insurance premium is likely to increase. Before you move, it’s a good idea to compare home insurance rates online to give yourself the best advantage of securing a lower premium at your new address.
One reason for this is that there’s more area to insure. If you moved, from say, an 800-square-foot condo to a five-bedroom detached home, you have more property to insure. Additional coverage for a shed or other outbuildings on your property also factor into the costs of insurance.
The age and construction of your home will determine how much more you’ll be paying. Home insurance premiums on older homes, for instance, could be higher because there are more risks associated with an older structure, like old plumbing, electrical, and heating systems.
3. Increased presence of wildlife
While large animals like moose and bears may pose a significant risk of damage to your home, don’t underestimate the perils of damage wrecked by pests and smaller animals. A racoon that has nibbled away at the electrical wiring of your home can cause much more damage and impact insurance costs than a backyard wreck by a bear.
Home insurance companies are likely to cover damage caused to the home by large wildlife, but smaller animals like mice and rats are not covered. Depending on the animal and the damage it has caused, your policy may cover damage to the home but not personal property.
Read your policy carefully to make sure that wildlife insurance is one of the “named perils” on your policy.
Don’t forget about auto insurance when moving to a rural area
Often, when non-drivers move from the city to a rural area, they need to purchase a vehicle to get around since there may not be public transit. If that’s the case, you’ll need to purchase auto insurance.
If you already have a vehicle but plan to continue to commute into a city for work while living on the outskirts, be sure to inform your auto insurance company of the change in your living situation as well. If your mileage increases, it will likely increase the insurance premium you pay on your car. Beyond that, your auto insurance company needs to have updated records of your current address so it knows where your vehicle is parked most of the time and can price your policy accordingly.
While considering a move to a rural area, make sure you have the proper home insurance coverage that is required for protection against floods and other natural disasters.
