Canadian homeowners renewing their home insurance policies in 2025 could be in for a sticker shock, as insurers respond to record-breaking claims exceeding $8.5 billion from wildfires, hailstorms, and floods in 2024.
“With claims pressure, there is pressure on premiums,” said Amanda Dean, Vice-President of the Ontario and Atlantic region of the Insurance Bureau of Canada (IBC).
Over the past two decades, insurance payouts for extreme weather events have skyrocketed. Between 2001 and 2010, severe weather-related claims averaged $780 million per year. In contrast, 2024 alone saw claims nearly ten times that amount.
“So going from under $1 billion a year on average to a record-breaking year of $8.5 billion—that is a staggering increase in claims,” Dean said.
Among the most destructive weather events last year:
- Calgary hailstorm – $3 billion in payouts
- Quebec flooding – $2.7 billion in claims
- Jasper wildfire – $1.1 billion in insurance losses
- GTA flash floods – $990 million in damages
Beyond direct weather damage, rising inflation, construction costs, and labor shortages have driven up insurance claim expenses.
“The cost of living, the cost of labor, the cost of materials—all of these increasing costs also mean increased costs of claims,” explained Daniel Ivans, a licensed insurance broker with RATESDOTCA.
The extent of premium hikes will vary by insurance provider, depending on regional risk factors and company losses. Some policyholders could see significant increases, while others may experience moderate adjustments.
To mitigate rising insurance costs, experts suggest:
- Bundling home and auto insurance to receive a multi-policy discount
- Increasing deductibles to lower monthly payments
- Installing security and loss prevention devices, such as burglar alarms or backwater valves
- Asking about additional discounts, especially if you’re a non-smoker, have a good credit score, or are mortgage-free
- Shopping around to compare rates, as not all insurance companies are impacted the same way
“If you’re someone who got a $500 increase in the mail, it might be time to start looking for an insurer that hasn’t been affected as significantly,” Ivans advised.
However, while finding a cheaper premium may be appealing, homeowners should carefully compare coverage options to ensure policies provide adequate protection.
Water damage remains one of the leading causes of home insurance claims, particularly for homeowners with finished basements. Many policies have payout limits for flood-related claims, making it essential to review coverage details carefully before making a switch.
As extreme weather becomes more frequent, insurance experts say climate-related risks will continue influencing premiums, underscoring the need for homeowners to stay informed and prepared.