Why your home insurance keeps getting more expensive and what climate change has to do with it

Home insurance is getting more expensive, harder to get and more confusing than ever. If you're wondering why your premium just jumped again, there's a good chance it comes down to one word: climate.

From flooding in neighbourhoods that never used to flood, to wildfire risk spreading into suburbs on the edge of BC and Alberta communities, to hailstorms that can total a roof in minutes, climate change is affecting the frequency and severity of home insurance losses in Canada. Insurance companies are responding with steep premium increases, tighter underwriting in high-risk areas and, in the hardest-hit regions, pulling back from the market altogether.

Climate change is affecting your homeowner insurance, so it's worth knowing which disasters are actually covered, which aren't, how to protect your home and your wallet, and where to turn for neutral advice.

The rising cost of climate risk

Let's start with your wallet. Statistics Canada has found that national home insurance premiums climbed roughly 45% between December 2019 and December 2025, more than double the rise in overall consumer prices over the same stretch. Looking at a slightly narrower window, premiums for combined home and mortgage insurance rose about 31% between 2021 and 2025, again outpacing general inflation by a wide margin.

The increases aren't even across the country. Alberta has consistently led the way, with a roughly 9% year-over-year jump in home insurance rates in the most recent annual comparison, following a year in which the province recorded more weather-related insured damage than any other in Canada. Saskatchewan and Manitoba have also seen some of the steepest year-over-year increases nationally, while Atlantic provinces like New Brunswick and Prince Edward Island have generally seen the smallest.

It isn't just pricing, either. In some higher-risk pockets of the country, homeowners are finding it harder to get a mortgage in the first place, simply because insurance is too expensive or too hard to secure. This isn't a future problem — it's already showing up at renewal time.

And then there's hail. Hailstorms across the Prairies are getting bigger, more frequent and less predictable. The August 2024 Calgary hailstorm alone generated roughly $3 billion in insured damage in about an hour, making it one of the costliest single events in Canadian insurance history. The result: roof claims are climbing, and so are premiums.

Coverage gaps: floods, wildfires, storms and hail

So what's actually covered, and what isn't? Here's the breakdown.

Floods

Flood risk is evolving quickly across Canada. Heavier rain events are causing flooding in areas once considered low-risk, and flood maps are shifting as a result. Standard home insurance policies in Canada generally don't include overland flood coverage — it has to be added separately, and coverage has only been widely available from private insurers since around 2015. Many homeowners in newly at-risk areas still don't have it.

Wildfires

Wildfire is one of the biggest drivers of non-renewals and premium increases in Western Canada. As more homes are built near forested land, the risk keeps climbing. Some communities have adopted wildfire mitigation programs, like FireSmart, that can help residents reduce their risk and, in some cases, keep their coverage.

Severe storms and hail

Storms are now a major cost driver across the country, especially across the Prairies. Larger hailstones mean more roof damage, and insurance companies are responding with higher rates and stricter policy terms.

Most homeowners assume their policy covers all of this. Depending on where you live and how your policy is worded, you may run into natural disaster exclusions, steep deductibles or an outright denial. That's why it's worth reviewing your policy regularly rather than assuming it still matches your risk.

Addressing coverage gaps in a changing risk landscape

As traditional coverage models strain under new pressures, insurance companies and homeowners alike are grappling with the gap between total economic losses from a disaster and what insurance pays out. That gap is widening as severe weather becomes more frequent and more costly. Canada's property and casualty insurers posted underwriting losses on home insurance in both 2023 and 2024, meaning claims outpaced the premiums collected.

Rising premiums, non-renewals and limited awareness of coverage gaps are leaving more Canadian households financially exposed after a disaster. Closing that gap often means reviewing your existing policy, adding endorsements for excluded perils and looking at specialized coverage for high-risk properties. Proactive steps such as home hardening and community-level mitigation programs can help keep coverage accessible and affordable.

How homeowners can adapt

The good news: you're not powerless. There are real steps you can take to lower your risk, strengthen your coverage and feel more confident heading into the next storm season.

Improve your home's resilience

Targeted upgrades can reduce your risk, help keep your coverage in place and sometimes lower your premium:

• Wildfire hardening – Use ember-resistant vents, cleared brush and fire-resistant roofing materials to reduce ignition risk.
• Flood resilience – Elevate mechanical systems, maintain a working sump pump and install flood barriers where appropriate.
• Storm prep – Install impact-resistant shingles and reinforce your garage door before severe weather arrives.

Review your insurance coverage

Understanding what is and isn't included in your policy can help you avoid an unpleasant surprise after a loss:

• Overland flood coverage – Check whether it's included in your policy, and if not, ask what it would cost to add.
• Storm and hail deductibles – Make sure you understand how your deductible applies to wind, hail and severe storm claims.
• Additional living expenses – Confirm your policy covers housing, meals and other costs if you can't stay in your home during repairs.

Shop smart with a broker

• Compare policies – Look closely at price, exclusions and claims service, not just the premium.
• Use an independent broker – A VIU by HUB broker can compare options across insurance companies for you.
• Ask about carrier stability – A good broker can help you choose a financially strong insurance company with a solid claims track record.

Policy and market solutions

Provincial and federal regulators are getting more involved as climate losses strain the market. Some provinces have introduced clearer disclosure requirements around exclusions and non-renewals, and Canada's provincial FAIR Plans continue to serve as insurers of last resort where private coverage isn't available. The federal government has also put money toward planning a national flood insurance program, though its launch has faced repeated delays. Meanwhile, industry groups like the Insurance Bureau of Canada (IBC) continue to push for faster action on both mitigation funding and flood insurance.

Climate change is reshaping what's covered, what it costs and whether you can get it at all.

With the right information, smart strategies and help from a VIU by HUB broker, you can take control of your coverage and protect what matters most.

Wondering what exclusions are in your current policy? Curious whether your home is in a rising-risk zone? Need help choosing the right coverage before wildfire or storm season hits? This is the moment to act. Insurance only helps when you have it in place before disaster strikes.

Sources: Statistics Canada, Insurance Bureau of Canada, and industry rate-tracking data, 2023–2025.