Can Severe Weather Increase My Home Insurance Premiums?
Unfortunately for homeowners, severe weather can be a factor that increases home insurance premiums in Canada.
The cost of weather-related damages and insurance payouts in Canada have been going up steadily. In 2024 there were $8.55 billion in insured losses due to severe weather events like wildfires, floods, and hailstorms, nearly triple the losses in 2023, reports the Insurance Bureau of Canada.
Western Financial Group, a 100% Canadian company, can help you navigate your car, home, business, and boat insurance during this period of economic uncertainty.
How can extreme weather increase home insurance premiums?
Canadian home insurance rates have increased over 5% in 2025. As extreme climate events become more common, it might not be unusual to see your home insurance continue to go up as insurance claims and payouts increase as a result.
More frequent claims
More frequent extreme weather events like wildfires, floods, wildfires, hailstorms, and hurricanes cause widespread property damage, which leads to more frequent claims and costly insurance claims. This trend is a significant factor in pushing up the cost of home insurance.
Costs to rebuild and repair
Weather-related disasters usually drive up demand for repairs and rebuilding because these events can cause major damage to homes such as structural, roof, and wall damages, pushing up labor and material costs. These costs have been increasing in recent years.
Cost to reinsure a home after weather-related claims
The cost of insuring homes in Canada has risen in recent years due to the increasing frequency and severity of weather-related claims.
The cost of insuring homes has increased because insurance companies take into account the higher likelihood of weather-related claims. Payout claims due to severe weather are a significant factor that push up the cost of home insurance.
Inflation
Inflation affects home insurance because it increases the cost of expenses related to owning a home. When a homeowner makes an insurance claim inflation after a weather disaster, inflation affects the cost of rebuilding, impacting insurance rates.
Regional areas at risk
Areas prone to specific weather events, such as hailstorms in Alberta, often see higher premiums due to localized risks. Areas that are prone to floods may see exclusions or higher rates for flood insurance coverage.
Reinsurance
Insurance companies purchase reinsurance policies from other companies that specialize in covering large-scale risks to protect themselves from catastrophic events. When insurers face a higher likelihood of claims due to increased severe weather events, they need to pay more for reinsurance to ensure they can cover potential losses.
What to do
Improved infrastructure, such as municipal water and sewer systems, building codes that have flood-proofing, wind-resistant design, fire-resistant materials, and community preparedness programs can help lessen risks related to severe weather.
What weather events does home insurance cover?
Weather disasters typically covered by home insurance in Canada include:
- Windstorms: Damage from high winds, tornadoes, and hurricanes involving roof, siding, or window repairs.
- Hail: Roof, siding, and personal property damage caused by hailstorms
- Lightning: Fires or electrical damage due to lightning strikes
- Wildfires: Direct fire damage to structures and personal property.
- Ice storms: Most standard home insurance policies cover damage caused by ice storms, including roof damage from ice dams and burst pipes, provided the damage is sudden and accidental and not due to neglect or lack of maintenance.
Add-ons to your standard home insurance policy that aren’t automatically included in your home insurance policy:
- Overland floods: Rising water from lakes, rivers, or heavy rainfall
- Earthquakes
- Sewer backup: Water damage from backed-up drains or sump pump failures are often excluded from standard home insurance policies.
Landslides and avalanches are generally not covered by your home insurance policy.
What’s the trend for insurers and floods?
Insurance providers are increasingly offering overland flood endorsements for home insurance policies.
How can homeowners help reduce their insurance premium increases?
Disaster-proofing your home
Install flood barriers or fire-resistant materials to help lower risk and potentially reduce premiums.
Use an insurance broker
Use an insurance broker like Western Financial Group. Western is a trusted, national insurance brokerage that has partnered with Canada’s top insurance companies to provide many options for home insurance.
We make the process easy by getting insurance quotes for you to choose from and giving you policy coverage options that suit your needs and budget as a homeowner.
Flood insurance
As a homeowner, you can purchase overland flood insurance which is an add-on to your home insurance policy.
Overland flooding insurance is usually widely available for almost all homeowners, condominium owners, and tenants. It’s not always available for high-risk flood areas, but if it is available in your area, you should consider adding it to your home insurance policy.
Canada's national flood insurance program, a partnership between the federal government and the property and casualty (P&C) insurance industry, is aiming to provide low-cost flood insurance to households at high risk of flooding. The program is expected to launch by the end of 2025.
What is extreme weather?
Extreme weather refers to unusual, severe, or unseasonal weather events, which usually cause major property damage. Extreme weather has been attributed to natural climate variability and climate change.
Examples include:
- Heat waves
- Cold snaps
- Droughts
- Wildfires
- Heavy precipitation
- Storms such as hurricanes and tornadoes
- Floods
- Landslides
When does Canada usually experience the most extreme weather-related events?
Spring and summer are usually the most active times for severe weather in Canada. These seasons bring conditions such as warm air, winds, and moisture, which are conducive to storms, wildfires, and floods.
What weather events contributed to billions in insured damages in 2024?
In 2024, for the first time in Canada, insured damage caused by severe weather events was over $8 billion. The 2024 record broke the previous record of $6 billion in 2016 due to the Fort McMurray wildfires in Alberta.
Wildfires, flash floods, remnants of Hurricane Debby, hail, winter deep freeze, and storms all contributed to record-setting weather damage in 2024, affecting Western Canada, Ontario, and Quebec.
Notable 2024 weather events were:
- Calgary hailstorm
- Jasper wildfire
- Flooding in Greater Toronto Area (GTA)
- Hurricane Debby in Quebec
Home insurance premiums in 2025 and 2026
Home insurance premiums have increased over 5% in 2025 and could potentially rise in 2026 due to weather disasters and the high cost of repairs and replacements.
Why Western?
100% Canadian!
Get the home insurance
We’ll help you save
Insuring Canadians for over 100 years!
