A major national story is quietly reshaping the true cost of homeownership in Canada. If you own a home — or are thinking about buying one — this is something you need to understand right now.
What's Happening Across Canada
Canada's home insurance landscape is undergoing a significant and accelerating shift, driven by the rising frequency and severity of extreme weather events.
Canada's home insurance safety net is starting to fray at the edges as the costs of extreme weather continue to rise. While competition is still healthy, and the country has so far avoided the coverage deserts growing in the United States, insurers are paring back policies in a variety of ways to adapt — raising premiums above the rate of inflation, increasingly excluding coverage of some risks, raising deductibles, and reducing their exposure to higher-risk areas.
The numbers behind this shift are stark. Between 2021 and 2025, home insurance costs rose 31 per cent according to Statistics Canada, more than double the overall inflation rate of 15 per cent over the same period. The trigger is no mystery: 2024 set a record $9.4 billion in insured losses across Canada, while the number of catastrophic weather events has averaged 15 per year in recent years — up from around two per year in the 1980s.
The squeeze is already being felt in how policies are written. Insurers are raising deductibles to upwards of $10,000 for perils like hail, reducing coverage, or simply not offering it for some risks such as flooding. In worst-case situations, insurance coverage is simply not available for certain perils at all. Flood coverage is particularly patchy: the Insurance Bureau of Canada estimates that about 1.5 million households — roughly 10 per cent — can't get flood insurance, while for those who can, it can add as much as $15,000 a year to premiums.
Experts see no quick resolution. As one industry analyst put it, the only real way out of this situation is for society as a whole to invest in climate resilience — because right now, consumers are on the receiving end with no easy answers in sight.
Ruby's Take
I want to be direct with Ottawa homeowners and buyers about what this means for us locally. While the most dramatic insurance cost increases have been in Alberta and B.C. to date, Ottawa is not immune. We've lived through the 2018 tornadoes, the 2019 flooding along the Ottawa River, and increasingly unpredictable freeze-thaw cycles that stress foundations and roofs. Ontario's insurance market is already under pressure, and what starts as a national trend doesn't stay national for long — it becomes your renewal notice.
Here's what I encourage every homeowner and prospective buyer in our community to do right now. First, review your current policy carefully — don't wait for your renewal. Check whether you actually have overland flood coverage, what your deductibles are for weather-related perils, and whether your replacement cost coverage reflects today's construction costs, which have risen over 60% since 2019. Second, if you're buying a home, factor insurance cost and insurability into your due diligence — not just mortgage qualification. A home near a floodplain or with an older roof isn't just a maintenance consideration anymore; it's an insurability question. This is a fast-moving issue, and the homeowners who stay informed and proactive will be far better positioned than those who are caught off guard. As always, I'm here to help you navigate these layers of the market — reach out anytime.
About the Author
Ruby Xue is one of Ottawa's most recognized real estate leaders and the founder of Keller Williams ICON Realty. Since launching her career in 2014, Ruby has been dedicated to raising the bar for professionalism in the industry. Her mission is to empower clients and agents with expert guidance, insightful market analysis, and a commitment to building lasting wealth through real estate.
Sourced from CTV News Business/Real Estate: https://www.ctvnews.ca/business/real-estate/article/home-insurers-raise-prices-rein-in-coverage-as-weather-events-worsen/
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