Canadian Home Insurance Premiums Surge 45% Amid Rising Climate Risks
Home insurance costs in Canada have risen by approximately 45% between December 2019 and the end of 2025, driven by a tripling of natural disaster frequency and record insured losses from extreme weather events.
Home insurance premiums across Canada have experienced a significant increase, with national costs rising by approximately 45 per cent between December 2019 and the end of 2025, according to Statistics Canada. This surge is primarily attributed to a marked increase in the frequency and severity of natural disasters, which has forced insurers to adjust their pricing models to reflect heightened climate risks.
Shauna Mamini, assistant vice-president at Aviva Canada, noted that while Canada experienced around 40 natural disasters in a decade forty years ago, that number has more than tripled today. The impact of this trend was evident in recent extreme weather events. On Sept. 2, a major storm hit the Greater Toronto Area, causing close to a month’s worth of rain to fall in just a couple of hours. The resulting basement flooding and downed trees left about 150,000 Ontario customers without power, and Toronto Fire Services handled nearly 1,500 calls within 24 hours.
The financial toll of these events is substantial. A similar storm in July 2024 cost $991-million, according to Catastrophe Indices and Quantification. In June, a storm outbreak across southern Saskatchewan and Manitoba produced tornadoes and hail, with damage estimated at $923-million. Additionally, Edmonton and Ottawa recorded their wettest summers on record, while Northwestern Ontario faced a historic fire season.
The Insurance Bureau of Canada estimates that average annual insured losses from extreme weather have exceeded $3.7-billion over the past decade, up from an inflation-adjusted $1.4-billion annually in the previous decade. The year 2024 alone saw a record $9-billion in claims. Consequently, insurers posted net underwriting losses on home insurance in parts of the country during 2023 and 2024.
Brendan Seale, assistant vice-president and head of sustainability for Definity Financial, explained that insurers model future risk based on area exposure and history of flooding, which directly influences pricing, deductibles, and limits. This means homeowners may see higher premiums even if they have not filed a claim, as costs from regional weather events are filtered through pooled insurance models.
Standard home insurance policies do not cover overland flooding, sewer backup, or seepage; such coverage must be purchased separately. However, affordability remains a challenge. The Insurance Bureau of Canada estimates that roughly 850,000 Canadian homes—about six per cent of the housing market—cannot obtain flood coverage in high-risk areas at a reasonable price. Although a federal backstop for households unable to obtain flood coverage was promised in 2019 and reaffirmed in the 2024 budget with an April 2026 launch date, it has yet to appear.
To mitigate costs, homeowners can implement preventative measures. Factors that may lower rates include being in a non-smoking household, having a newly built home, installing monitored security alarms, water leak detection systems, backwater valves, sump pumps with battery backup, and leak sensors. Other discounts may apply for seniors, retirees, alumni, professional body members, and those who bundle home and auto insurance or pay annually. The Canadian Climate Institute calculates that every dollar spent on climate adaptation yields a return on investment of between $13 and $15.