The storm missed your house. You’re still paying for it on your home insurance renewal

When my home insurance renewal arrived in the mail earlier this year, my insurance company dropped a surprise: My premium was rising 20 per cent.

The amount felt unfair; I’ve never had a home insurance claim and the rate of inflation in Canada was 3.2 per cent during the same month, far less than the premium increase.

Unfortunately, I’m not alone in this experience right now.

Statistics Canada found that home insurance costs rose about 45 per cent nationally between December, 2019, and the end of 2025, roughly double general inflation over the same stretch.

One of the biggest culprits is the surge in claims from major weather and climate events in Canada. Floods, forest fires and ice storms have inflicted record damage. But even if your city has been spared, those costs are still filtering to you because of the way insurance works.

“Forty years ago, Canada experienced around 40 natural disasters in a decade,” said Shauna Mamini, Aviva Canada assistant vice-president of property portfolio and exposure management. “Today, that number has more than tripled.”

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An insurance company doesn’t price your home in isolation. It collects premiums from everyone in a pool, invests that amount and pays claims out as they occur. In an ordinary year, an insurance company absorbs the usual run of kitchen fires and burst pipes, and a quiet year in one region offsets a bad one somewhere else.

There have been a lot of bad years for home insurance claims recently. This month is a prime example. A major storm hit the Greater Toronto Area on Sept. 2, with close to a month’s worth of rain falling on parts of the city in a couple of hours, flooding basements and knocking down trees. About 150,000 Ontario customers lost power and the Toronto Fire Services handled nearly 1,500 calls in 24 hours – one of its busiest days on record.

It’s expected to be expensive – perhaps a record claim event for the province. A similar storm in July, 2024, cost $991-million, according to Catastrophe Indices and Quantification, which produces Canada’s official industry loss estimates.

Standard policies don’t cover overland flooding, sewer back up or seepage – the kind of damage that might occur as a result of a storm. Storm flooding coverage needs to be bought separately, and it increases your premium to have it.

The GTA flash flood was just one of a number of extreme weather events this year. A June storm outbreak across southern Saskatchewan and Manitoba produced tornadoes and hail, with damage estimated to have cost $923-million. Edmonton and Ottawa both recorded their wettest summers on record, while Northwestern Ontario had a historic fire season.

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Every insurer is now trying to model where the next major weather event may lead to major future damage – and changing insurance to reflect heightened risk.

“If an area is particularly exposed to a risk or… if that street has a history of flooding or is more likely to flood in the future, then it influences pricing,” said Brendan Seale, assistant vice-president and head of sustainability for Definity Financial. “It may influence things like deductibles and limits and the different coverages that are available. These are all dynamic parts of the system and insurers need to ensure that they’re taking enough premium … so that they’re able to pay claims in the future.”

The Insurance Bureau of Canada puts average annual insured losses from extreme weather at more than $3.7-billion over the past decade, up from an inflation-adjusted $1.4-billion annually the decade before. The record year, 2024, had $9-billion in claims.

Insurers spent 2023 and 2024 posting net underwriting losses on home insurance in parts of the country, meaning they paid out more than they collected. Reinsurance costs spiked over the same period and have stayed elevated.

All of these costs are being filtered to you, even if you’ve never filed a claim.

And while that part is out of your control, there are a few things you can do to help lower your home insurance bill. First, start with making sure you’re aware of what gets you a discount on your home insurance.

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Factors that can lower your rate include being in a non-smoking household, having a newly built home, a monitored security alarm, water leak detection, as well as discounts for seniors and retirees or being part of an alumni association or professional body.

Also, if you have a car, bundle your home and auto with the same insurance carrier to receive a discount. You may also save money by paying annually, rather than monthly, since monthly installments frequently carry a financing charge.

And while you can earn a loyalty discount for being with your insurer for multiple years, you can often find a better rate by switching at renewal. Be sure to get multiple quotes every year.

Look into home upgrades that both protect your home and earn you a discount.

“Preventative resilience measures are the best investment a homeowner can make,” said Aviva’s Ms. Mamini.

A backwater valve protects against sewer backup, and many municipalities offer subsidies covering part of the installation cost. A sump pump with battery backup will help ensure ground water doesn’t pool into your basement during major rain – the battery allows it to keep running when the power goes out. Leak sensors near the water heater, washing machine and under sinks can catch a slow drip before it becomes an expensive problem. Most insurers credit all three.

Finally, ask for your premium to be quoted with $500, $1,000 and $2,500 deductibles and compare the prices. If you can afford the higher deductible out of pocket, it could save you hundreds in premium every year.

There’s a limit to what individual homeowners can fix. The Insurance Bureau of Canada estimates roughly 850,000 Canadian homes, about six per cent of the housing market, cannot obtain flood coverage in high-risk areas at a reasonable price. A federal backstop for those households was promised in 2019, reaffirmed in the 2024 budget with an April, 2026, launch date, and has yet to appear.

Meanwhile, the Canadian Climate Institute calculates that every dollar spent on climate adaptation – improving infrastructure to better handle worsening storms and fires – has a return on investment of between $13 and $15.

“We can see a very clear pattern of heightened severity and heightened frequency of these events,” said Mr. Seale of Definity. “The risk profile is changing and I think that our industry, along with the number of other stakeholders across society, need to adopt a different posture around this… one that’s more proactive and more preventative.”

Until that changes, the cost of Canada’s weather will keep arriving the way it arrived for me: as an expensive surprise in the mail.

John Shmuel is the content director at Surex, an insurance brokerage based in Magrath, Alta. He is also a writer and financial commentator focusing on insurance.