Extreme weather fallout: Experts warn Canadian home insurance premiums to rise this year

As California deals with devastating wildfires, experts are warning homeowners about the impact of severe weather in Canada this year.

As California deals with devastating wildfires, experts are warning homeowners about the impact of severe weather in Canada this year.

Home insurance premiums are expected to climb this year.

The insurance industry says it’s grappling with record-breaking losses from extreme weather events, labour shortages in construction driving up replacement costs and wait times, and inflation.

According to the Insurance Bureau of Canada, severe weather events caused more than $7.8 billion in insured damage across Canada last year. That’s more than double the $3.1 billion recorded in 2023.

It comes as Statistics Canada data shows that residential building construction costs have risen 66 per cent. Home replacement costs have risen 24 per cent from 2019, compared with a 19 per cent general inflation rate during the same time period.

“The home insurance industry is experiencing record claims losses while at the same time facing the challenge of rising replacement costs. The result is likely to be higher home insurance premiums for consumers this year when their policies renew, even if they haven’t made any claims,” says Daniel Ivans, RATESDOTCA insurance expert.

Ivans suggests shopping around for better deals instead of just renewing your policy annually.