Natural disasters and extreme weather events are making home insurance increasingly expensive for Canadians, according to a new Statistics Canada report. The report says rising claims from floods, wildfires, hailstorms, and severe storms are driving up insurers’ costs, leading to higher premiums for homeowners across the country.
Statistics Canada found that the frequency and severity of extreme weather events have increased significantly in recent years, resulting in billions of dollars in insured losses. As insurers pay out more claims, the higher costs are being reflected in the price of home insurance policies.
The Insurance Bureau of Canada (IBC) said extreme weather is fundamentally reshaping Canada’s home insurance market. It warned that more households are facing greater financial risks as climate-related disasters become more common and more destructive.
Experts say floods remain the costliest natural hazard in Canada, while wildfires, windstorms, and hail events have also contributed to record insurance payouts in recent years. In many high-risk areas, homeowners may need to purchase additional coverage for risks such as overland flooding or sewer backup, which are not always included in standard insurance policies.
The report also highlights that rising construction and repair costs, along with inflation, are adding further pressure to insurance premiums. Rebuilding homes after disasters has become significantly more expensive, increasing the financial burden on both insurers and policyholders.
The Insurance Bureau of Canada is urging governments at all levels to invest more in flood protection, wildfire mitigation, and climate-resilient infrastructure to help reduce future losses and stabilize insurance costs for Canadians. Without stronger adaptation measures, insurance premiums are expected to remain under pressure as extreme weather events become more frequent.