As extreme weather events continue to escalate, Canadian homeowners are feeling the financial pinch of rising home insurance rates, which have surged by 5.28% in 2025. This increase follows a substantial 7.66% rise in the previous year, according to a report from My Choice Financial, a Canadian insurance aggregator and comparison website. Experts point to climate change as a significant driver behind these hikes, which are well above the current inflation rate.
Jason Clark, the national director of climate change and federal issues at the Insurance Bureau of Canada, highlighted the severity of the situation, stating, “It’s driven historic insured losses across the country. Particularly, we had a very severe single quarter in 2024 where we saw over $7 billion in insured losses in that single quarter last summer.” This alarming trend is underscored by the Insurance Bureau's report of record-breaking losses of $8.5 billion paid out in 2024, which is triple the losses seen in 2023 and twelve times the annual average from 2001 to 2010.
The catastrophic weather patterns have not only wreaked havoc on personal finances but have also raised concerns about the adequacy of flood insurance coverage in Canada. Approximately 1.5 million homes are currently ineligible for flood insurance due to high-risk assessments. Clark noted, “What we’re seeing is the level of risk across the country is increasing, whether that’s the threat of hurricanes in Atlantic Canada, hailstorms in Alberta, or wildfire across the country. The costliest and most severe event we experience in Canada is flooding.”
In light of these challenges, the Canadian government has committed funding towards a national flood insurance program for high-risk households in the 2024 budget. However, implementation has stalled due to Parliament being prorogued, leaving many homeowners vulnerable.
Mary Kelly, a finance professor at Wilfrid Laurier University, emphasized the need for proactive measures, stating, “Everywhere in Canada can now be a danger zone,” as extreme weather events become increasingly unpredictable. She pointed out that even homes in traditionally safe areas can be affected by localized weather events, such as sudden rainstorms that overwhelm sewage systems. Kelly advocates for government intervention, suggesting that a model similar to California's earthquake insurance program could provide necessary support for Canadians facing high-risk scenarios.
“What we will need to see in the future for insurers to continue to offer their products is to have some sort of government commitment to come and say, if things are really, really bad, we’ll provide a backstop so you don’t go bankrupt,” she explained.
With the increasing frequency of severe weather events, homeowners are urged to take preventative steps now. A recent Léger poll commissioned by Allstate Insurance Company of Canada revealed that only 27% of Canadian homeowners feel very confident that their homes are prepared for major weather events like tornadoes, flooding, or wildfires. Odel Laing, Agency Manager at Allstate Canada, remarked, “Large weather and climate events are affecting more Canadians more often, year after year.”
Allstate’s data indicates that nearly 30% of claims received over the past decade stem from such catastrophic events, with a notable spike in 2024 where claims related to severe weather were approximately 2.4 times higher than in 2023. Laing emphasized the importance of being prepared, stating, “Insurance coverage can help people recover their homes and vehicles following a severe storm or wildfire, but the family heirlooms, photographs, and other personally important items are more difficult to replace.”
To assist homeowners in preparing for future events, Allstate offers several practical tips:
- Create an Emergency Plan: Identify safe spaces in your home, establish a family communication plan, and know local evacuation routes.
- Build an Emergency Kit: Have essentials ready for 72 hours, including water, non-perishable food, flashlights, first-aid supplies, and important documents in waterproof containers.
- Secure Your Property: Install sump pumps, backwater valves, and reinforce windows and doors to help reduce damage from floods and severe storms.
- Prepare for Wildfires: Clear dry vegetation around your home, and use fire-resistant materials.
- Review and Update Your Insurance: Ensure you have the right coverage for your needs.
The findings from the Léger survey were based on an online questionnaire conducted from January 23 to 27, 2025, involving 1,000 Canadian homeowners aged 18 and older. While the sample was not probabilistic, a similar-sized representative sample would typically have a margin of error of ±3.1% 19 times out of 20.
In Thunder Bay and across Canada, the urgency for homeowners to prepare for extreme weather is palpable. As the cost and frequency of severe weather events are expected to rise, the message is clear: the best time to prepare is not when the storm is imminent, but when the skies are clear. Kelly and Clark both agree that collective action is necessary to address the challenges posed by climate change, urging all levels of government to invest in community risk protection measures.
“There is a pressing need for us collectively to focus on climate adaptation and look particularly to all levels of government to make investments in community risk protection,” Clark stated, underscoring the importance of proactive measures in safeguarding homes and lives against the backdrop of an increasingly unpredictable climate.
