$9.4B Record Claims: Why Home Insurance is Rising in 2026
The expense of disasters caused by weather is increasing year after year, and 2026 is shaping up to be just as challenging. Insurers used to pay an average of $400 million annually for catastrophic weather events between 1983 and 2008, but since 2009, that average has climbed to nearly $2 billion.
We recently moved past the most severe year of damage ever recorded in Canada. In 2024, insured damages from weather events reached a staggering $9.4 billion.
The Growing Cost of Canadian Weather Disasters:
$400 Million
Annual average cost of catastrophic weather (1983–2008)
$2 Billion
The “New Normal” annual average since 2009
$9.4 Billion
Record-breaking insured damages reached in 2024
These 2024 losses were 12x the yearly average seen over the last decade.
As we look at the data from 2025 and the forecast for 2026, it’s clear this trend isn’t slowing down. Canadian homeowners should prepare for more shifts in their home insurance rates as we head into 2026.
Record Weather Losses Impact Insurance Market
Breaking down the $9.4B damage total
While 2024 remains the costliest year on record, the volatility continued through 2025. We are seeing a shift where events like the Calgary hailstorm are no longer “once-in-a-lifetime” occurrences.
In fact, Western Canadian storms in the summer of 2025 added hundreds of millions more in insured losses to the industry total, specifically affecting the prairies with severe wind and hail.
Largest Severe Weather Events in 2025
March 28–31
→
Ontario and Quebec Ice Storm: $490 million in insured damages
May
→
Flin Flon and La Ronge Wildfires: $300 million in insured losses
July
→
Calgary Hailstorm: $160 million in insured claims
August
→
Prairie Severe Storms: $235 million in total damages
December
→
BC Atmospheric River Series: $90 million in insured damages
Disclaimer: Data provided by the Insurance Bureau of Canada (IBC). Total severe weather-related insured losses in Canada exceeded $2.4 billion for the 2025 calendar year.
Historical context and trends
Insurance companies paid $557.34 million yearly for catastrophic claims between 1983 and 2008. This number has jumped to almost $2.79 billion per year since 2009. The industry is still reeling from the fact that Canada’s P&C industry actually lost money on home insurance throughout 2023 and 2024 due to the sheer volume of claims.
“Climate change is significantly impacting weather patterns, leading to more extreme events and higher insurance payouts,” explains Steven Harris, a licensed insurance broker expert. “These costs are directly reflected in the rising premiums homeowners see on their renewal notices.”
Canada’s 10 Highest Insured Loss Years (Severe Weather)
2024
→
$9.4 Billion: Calgary hailstorm, Jasper wildfire, Hurricane Debby, GTA floods
2016
→
$6.5 Billion: Fort McMurray wildfire
2013
→
$4.2 Billion: Alberta floods, GTA floods & ice storm
2023
→
$3.8 Billion: Nova Scotia floods, Okanagan/Shuswap wildfires
2022
→
$3.8 Billion: ON/QC Derecho, Hurricane Fiona
1998
→
$3.1 Billion: Quebec ice storm
2020
→
$2.7 Billion: Fort McMurray flood, Calgary hailstorm
2021
→
$2.6 Billion: Calgary hailstorm, BC floods
2018
→
$2.6 Billion: ON/QC rain and windstorms
2025
→
$2.4 Billion: Ontario/Quebec ice storm, Prairie wildfires
Source: Insurance Bureau of Canada (IBC). Note: Loss and adjusted expenses are in 2025 dollars.
Rising Home Insurance Rates
Factors Other than Weather
Beyond the weather, home replacement costs have jumped significantly since 2019. Residential construction costs are up over 60%, making every claim more expensive to settle. These rising costs have made it difficult for insurance companies to break even on the property side of their business.
Construction Industry Challenges:
Worker shortages are a major bottleneck. BuildForce Canada expects a shortage of over 85,000 workers in the next decade. This leads to longer repair times, which means insurers have to pay for “Additional Living Expenses” (like hotels) for longer, driving up the total cost of every claim.
The Industry’s Financial Struggle
It’s not just homeowners feeling the pinch; insurance companies themselves are struggling to maintain profitability. According to recent industry data, Canada’s P&C industry actually lost money on home insurance in 2023 and 2024. For every dollar collected in premiums, insurers were paying out more in claims and operating expenses than they were taking in.
“The personal property line continues to be challenged by the frequency and severity of weather-related events,” creating a situation where the industry saw a net underwriting loss for two consecutive years. This financial pressure is a primary driver behind the rate increases we are seeing today.
Regional Rate Variations
While the national average is rising, the impact varies significantly depending on where you live. Homeowners in the Prairies are seeing some of the sharpest increases due to the high frequency of hail and wind damage.
Home Insurance Premium Increases by Province
| Province | % Premium Change | Primary Cause |
|---|---|---|
| Saskatchewan | +12.16% | Hail/Wind Severity |
| Manitoba | +11.31% | Summer Storms |
| Alberta | +9.25% | Wildfire/Hail Risk |
| Quebec | +8.02% | Water/Ice Damages |
| British Columbia | +7.63% | Flooding |
Future Projections and 2026 Outlook
As we head into 2026, the industry’s focus is shifting. Canadian P&C brokers have highlighted that their top priorities for 2026 include managing the “hard market” and finding ways to keep insurance available in high-risk zones. Homeowners should prepare for:
- Higher deductibles, particularly for water and hail damage.
- Stricter requirements for roof maintenance and age.
Increasing Deductibles for Water Damage:
Some carriers, like Aviva Canada, have introduced significant changes to their property products. Introduced in 2024, there is now a mandatory minimum deductible of $2,500 for water damage.
This minimum applies to any loss where water is the main cause (such as a burst pipe, leaking appliance, or claims) under a Sewer Back-Up Endorsement. Additionally, a new $2,500 minimum deductible now applies specifically to the Overland Water Endorsement as outlined in the endorsement wording.
As these measures become standard among major insurers, it’s more important than ever to review how your specific deductible handles water-related risks.
Homeowner Protection Strategies
Damage prevention measures
Investing in your home is the most effective way to keep your premiums manageable.
Effective Home Protection Strategies:
- Install a sump pump with a battery backup.
- Use impact-resistant roofing materials if you live in hail-prone areas.
- Clear gutters and downspouts to ensure water moves away from your foundation.
- Install backflow valves to prevent sewer backup during heavy rains.
- Check your attic regularly for water damage
- Secure outdoor furniture before storms
- Trim tree branches away from your house to reduce wind damage risks
Research shows that every dollar spent on wind protection can save over $8 in damage repair. Budget-friendly protective measures include installing a sump pump with backup power, proper landscaping, and adequate insulation.
Frequently Asked Questions
How much did weather-related damage cost Canada in 2024 vs 2025?
In 2024, Canada saw a record-breaking $9.4 billion in insured losses, the highest ever recorded. By comparison, 2025 losses currently exceed $2.4 billion. However, it is important to note that the 2025 figures are preliminary; insurers likely haven’t tallied all loss expenses yet.
Why are home insurance rates increasing in Canada?
Rates are rising because the P&C industry faced net underwriting losses in 2023 and 2024. Beyond severe weather, a 60% jump in residential construction costs and a shortage of 85,000 workers have made claims significantly more expensive to settle.
Which regions in Canada are most affected by rising insurance rates?
The Prairie provinces are currently seeing the sharpest increases. Saskatchewan and Manitoba have experienced jumps as high as 12.16% and 11.31% respectively, largely due to the increasing frequency of severe hail and wind events in those regions.
What can homeowners do to protect themselves from rising insurance costs?
Homeowners can mitigate costs by increasing their deductibles, bundling their vehicles under a single auto policy, and investing in loss-prevention upgrades such as backwater valves or impact-resistant roofing to lower their risk profile in the eyes of insurers.
How is climate change impacting the insurance industry in Canada?
Climate change has shifted the “annual average” for catastrophic losses from $400 million (pre-2009) to nearly $2 billion today. This increased volatility has made personal property insurance a challenging line for insurers to maintain profitability without regular rate adjustments.
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Posted in Home & Tenant on February 5, 2025 by Hope Prost
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