Mounting Costs

This report, backed by research from the University of Toronto, analyzes how the cost of weather related insurance claims (floods etc)  have grown over that of everyday claims (broken pipes etc). Since both types of claims are similarly impacted  by things like inflation and the rising construction costs, they should grow at a similar pace. When extreme weather-related claims start growing much faster, something else must be pushing them up. That something is climate change — and its effect has been getting bigger every year.

We estimate that the average homeowner's annual insurance premium is $533 higher today than it was in 2008 (in 2024 CAD). In other words, homeowners have likely paid more than $3,000 in extra insurance costs over the past six years due to the effects of worsened climate-driven extreme weather events.

Weather-related insurance claims at Canada's largest home insurer have been rising at 11.9 per cent per year since 2008, which far outpaces routine claims, rising just 1.97 per cent  annually over the same period. This has a direct impact on what homeowners pay. 

For every $1 insurers anticipate paying out in weather-related claims, insurance companies charge homeowners $1.78 in higher premiums. In total, this research estimates that climate change accounts for 54.5 per cent of total home insurance premium increases between 2008 and 2024.

As climate change worsens, weather-related claims will grow and further drive costs up. The government is turning their back on climate action which will make home insurance increasingly unaffordable and further put Canadians financial health at risk.