Another year of rising rural thefts has left many farmers up in arms about what to do and where to turn, said an insurance broker.
“I understand how frustrated the farmers are because this is probably the worst year that we’ve ever seen, quite literally, in terms of farm theft,” said Barry Andrew of Kindersley Insurance in Kindersley, Sask.
“I understand what they’re going through because we deal with it on an insurance side — a P and C side (property and casualty).”
He said rural homeowners need to educate themselves about the different security systems that are available on the market, how they function and their effectiveness at deterring theft.
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Many solutions are on the market, but all are not equal and money doesn’t necessarily buy peace of mind.
Number one on the list before buying a home security system is to call an insurance broker, advises Saskatchewan Government Insurance.
“That’s where we’d really recommend for farmers or homeowners who are contemplating installing some sort of lost mitigation device like this to contact their broker,” said Kurtis Reeder, senior director of the personal lines segment with SGI Canada.
“The broker can quote it with the device and without the device and they can see the premium savings if they do install it.… Have them play out a few different options for you is the best strategy on that one.”
Always consider the source, said Andrew, who has seen many people sign on the dotted line with inaccurate and incomplete information from companies selling 24/7 home monitoring systems.
“What we find a lot is the people that are selling these security systems, I don’t want to say they’re misleading, but they don’t disclose all the information,” he said.
“They’ll say, ‘well your insurance policy pretty much pays for the security system,’ which is a long way from the truth.”
Andrew said insurance companies base their discounts on a percentage. Every policy is now individually rated and each situation is different, but the discounts remain standard.
“In town, depending on your system and how it’s monitored it’s a 20 percent discount, but in rural most of the insurance companies are only giving a five percent discount,” he said.
“So it’s not very significant.”
In spite of the fear of theft, Deb Smith said she has learned to be patient and exercise due diligence before getting another home monitoring system.
“What I’m finding is 90 percent of people that put the system in hardly use any of the features. When it comes down to the nitty-gritty, a lot of people don’t use them,” said the Kindersley area resident.
“My advice is to keep it simple. Keep it specifically for your needs and have insurance before you sign the contract that it is going to do what they say it is going to do.”
In order to qualify for a discount, Andrew and Reeder said it must be a professionally installed monitoring system from a licensed company that’s providing home security.
“It has to be tied into a call centre that would be triggered if there’s a detection and be able to contact the police to respond,” said Reeder.
Added Andrew: “If you go buy a home security system that you’re monitoring yourself, that doesn’t qualify.”
Reeder said discount ratings are based on the location of the dwelling or the farm property in relation to the fire protection rating, which is a commonly used rating system in the insurance industry.
“The analyses that we’ve done is the distance to a fire hall also corresponds to the response time for a police detachment,” he said.
“So for homeowners or farm owners who are in a fire protection rating of what we call protected or semi-protected, meaning they’re within 13 kilometres of a responding fire hall, will typically receive a greater discount than someone who is beyond the 13 km threshold.
He said insurance companies have taken that classification system and done their own analyses for theft, whose variables can be used to predict the severity and frequency of theft.
“More rural locations that are in that unprotected location will see greater frequency and severity of theft losses due to the response time of the police detachment,” he said.
“There’s a correlation between the two.”
Reeder said installation of 24/7 home monitoring systems are not keeping pace with rural crime statistics.
“I haven’t seen the needle move on that over the last little while. It’s typically around 10 percent of our book has a monitored security system,” he said. “We really haven’t seen an influx of monitored security systems being added on insurance policies.”
