Toronto widow shocked to find insurance premiums increased after husband's death

A Toronto woman said she was still dealing with the grief of her husband’s death last month when she found out her insurance company had increased her premiums.

“It really ticked me off because we have been with that insurance company for 19 years – 19 years and we never made a claim on the car or the house," Jo Waterhouse told CTV News Toronto.

Waterhouse said she and her husband David had been married for 41 years when he passed following a lengthy illness. After he died, she said she felt she should get her financial affairs in order.

“I told everybody about his passing, the government, financial institutions and I thought I should tell my insurance broker too,” she said.

But not long after she contacted her insurance company, she said she was told her home insurance premiums would be increasing $144 annually, and that she would need to pay a prorated charge of $47.52 immediately.

The reason? Her husband’s credit score was slightly better than hers was, she said.

“I can’t believe I’m being charged this,” she said. “Especially when you are grieving the loss of your soulmate and they stick this to you and it's not necessarily the money, it’s the principle.”

Your credit score is an important financial indicator mostly used to tell lenders if you're considered a good credit risk, but increasingly often, insurance companies have been using credit information to also determine how much to charge for home insurance.

“A lot of insurance companies will use credit scores to determine your home insurance premiums," Anne Marie Thomas, Director of Consumer and Industry Relations, with the Insurance Bureau of Canada (IBC), told CTV News Toronto.

IBC said a code of conduct was approved in 2021 to allow insurance companies to use credit information to set home insurance rates, and about 85 per cent of the insurer marketplace has agreed to the code.

It’s another reason to make sure your credit history and credit score remains in good standing.

“It's always a good idea to make sure your credit score is good and to check your credit score about once a year to make sure there are no errors,” Thomas said.

Waterhouse is insured by the Wawanesa Mutual Insurance Company.

Senior Communications Specialist Brad Hartle with Wawanesa told CTV News in a statement, “We extend our sincere condolences to Mrs. Waterhouse for her loss. After speaking with her broker, we have issued Mrs. Waterhouse a refund for the additional premium she was charged. In circumstances like this, it is not our intention to increase premiums. We will also be reaching out to Mrs. Waterhouse directly.”

Waterhouse said she now plans to shop around and check insurance quotes with other companies.

Not every insurance company uses credit scores to determine how much your home insurance premiums should be, so if you’re not sure of the policy, ask your insurance company to find out.

While insurance companies can use credit scores for home insurance purposes, they require your permission first, and if you decline, you could be charged a higher insurance rate than if you agreed to a credit check.

Insurance companies are not allowed to use credit scores to calculate how much you pay for auto insurance.