Canadian insurance rates could rise due to severe weather: IBC

Many Canadians could face higher insurance rates this year, as the frequency of severe weather events ramps up.

There’s a growing worry Canadian insurance rates could rise next year thanks to a number of severe weather events around the globe.

Local flooding, wildfires and damaging storms are frequently seen as insurance increase culprits, but events outside of the country could spell even more trouble moving forward.

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“The unfortunate reality is that today we’re moving in the wrong direction,” Aaron Sutherland with the Insurance Bureau of Canada said.

“We’re seeing an increase in the frequency, an increase in the severity, and an increase in the size of financial damage following natural disasters, and it will have an impact on premiums moving forward.”

Currently, providers are watching the California wildfires.

There’s a chance, if the fires are sustained and somehow cause even more damage, they could raise the cost of reinsurance policies.

Sutherland says if the rest of the year plays out like January has, Canadian prices are sure to rise in 2026.

“Reinsurance is essentially insurance for insurance companies, and those prices are dictated by global trends,” he told CTV News.

“So, it’s really going to depend on what the rest of 2025 looks like from an insurance claim and a disaster perspective.”

The signs aren’t positive. The Bureau says insurable damages from severe weather events in Canada hit a record $8.5 billion last year.

That’s more than $2 billion higher than the previous record, in 2016.

“And in response to a lot of these challenges, insurance companies in many cases are taking on limitations on their coverages,” said RatesDotCa insurance expert and licensed insurance broker Daniel Ivans.

What can Canadians do?

The good news is the country has a competitive market, so experts advise not to be afraid of shopping around.

Oftentimes, savings can be found if policies are bundled.

“When you’re sick, you speak to a doctor, and if you’re being charged with something, you speak to a lawyer,” Ivans said. “So, when you need insurance help, you need to speak to an insurance advisor, either an agent or a broker.”

Another thing homeowners can do is take preventative measures that can qualify them for an insurance discount.

Installing storm shutters or impact-resistant windows isn’t cheap, but a lot of the time, work done can help lower rates in the long term.