Extreme weather in Canada drives up insurance costs; home premiums surge 45 percent

The Insurance Cost Crisis

While Canada's insurers used to pay out a few hundred million dollars annually in insurance claims for things like storms, wildfires and floods, "in the past few years that has ballooned to being over $2 billion … every year and just a couple years ago it nearly hit $10 billion," putting pressure on premiums from coast to coast. Rising insurance premiums are increasingly driven by extreme weather like floods and fires, Statistics Canada analysts found.

Between December 2019 and December 2025, premiums for home and mortgage insurance increased 45 per cent, more than twice as much as the all-items Consumer Price Index, which increased 21 per cent over the same period.

Federal Assistance and Future Outlook

Provincial and territorial governments apply to the federal program to access funds following natural disasters, which has paid out more than $14 billion since its inception in 1970, with the Parliamentary Budget Officer predicting the cost will climb from a yearly average of $881 million between 2010 and 2024 to $1.8 billion per year from 2025-2034.

What This Means for Foreigners

As a newcomer or expat buying or renting property in Canada, understand that homeowners and renters are facing significantly higher insurance costs due to climate risk. When shopping for insurance, compare multiple providers—the market remains competitive but fragmented by region. Renters should secure coverage, as landlords' increased premiums may eventually be passed along. Those in high-risk areas (coastal regions, flood-prone zones, wildfire corridors) will pay more; factor this into relocation decisions. Federal disaster assistance has expanded, but personal insurance is your first line of protection.

Sources

• CBC News — How extreme weather makes life more expensive for Canadians