Due to wildfires, hailstorms, and flooding across the country last year, home owners expecting their insurance to renew soon could get hit with a big increase depending on their company following a year of insurance losses in the billions of dollars.
“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).
According to the IBC, between 2001 and 2010, severe weather claims amounted to about $780 million a year, however in 2024 alone, claims added up to nearly 10 times that.
“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,” said Dean.
The largest severe weather events in 2024 included the Calgary hailstorm with payouts of $3 billion and Quebec’s flooding payouts of $2.7 billion.
The wildfire that took place last summer in Jasper accumulated to $1.1 billion in payouts, and the Greater Toronto Area flash floods cost insurance companies $990 million.
The huge payouts also attributed to inflation, building costs, and labour shortages in construction.
“The cost of living, the cost of labour, the cost of parts, all of these things increasing also means increased costs of claims,” Daniel Ivans, insurance expert and licenced insurance broker with RATESDOTCA told CTV News Toronto.
The amount insurance policies may increase will differ from company to company.
How you can decrease your home insurance rates
If you’re facing an increase in home insurance, to try and reduce your premiums you can bundle your home and auto insurance and increase your deductible.
You can also install loss prevention devices such as burglar alarms or backwater valves.
Insurance experts also recommend asking about additional discounts, and see if there are any options available if you’re a non-smoker, have a good credit rating, or if you’re mortgage free.
It’s also important to shop around.
“If you’re someone who got a $500 increase in the mail, it might be time to start looking around for an insurance company that hasn’t been impacted the same way that your company has,” said Ivans.
While you may find cheaper premium rates elsewhere, it’s also important to compare policies carefully as coverage options will differ and there could be limits if you need to make a claim.
One of the most common claims when it comes to home insurance is water damage. Many people have finished basements and policies have limits on how much the insurance company will payout. It’s a coverage you should review carefully.
