Ontario homeowners are experiencing major inflation in home insurance premiums — and it is unlikely to end anytime soon. The insurance industry blames the skyrocketing damages from “severe weather events” like flooding and wildfires that are becoming more intense and frequent with climate breakdown. The industry recognizes this is an insurance crisis that is not going away. The Ford government, meanwhile, has chosen to actively ignore the problem. It has buried expert advice on climate adaptation measures that could protect homeowners from higher insurance premiums and the growing threat of household uninsurability. Worse, Ford’s gutting of environmental protections in the province adds to homeowner risk.
In 2014 the average annual Ontario home insurance premium was $627. In 2024 the average annual premium was $1,155, almost double the cost across the ten-year period.
The insurance sector reports that recent weather-related disasters in Ontario and across Canada have been costly. July 2024 flash floods in Toronto and southern Ontario caused over $940 million in insured damage. August flooding added more than $100 million. It was the second costliest summer for flooding in the province’s history, only surpassed by the cost of Toronto floods in 2013.
Across Canada, last year shattered the “record for the costliest year for severe weather-related losses in Canadian history at $8.5 billion.” The year was far more costly than 2016, when the Fort McMurray wildfires contributed to the previous record of $6 billion. The Insurance Bureau of Canada (IBC) reported that “the 2024 total is nearly triple the total insured losses recorded in 2023 and 12 times the annual average of $701 million in the decade between 2001 and 2010.”
The Bureau has sounded the alarm about the insurance impact of the climate emergency. “Canada is clearly becoming a riskier place to live, work and insure,” according to Craig Stewart, IBC’s vice-president of climate change and federal issues, “… we should all get ready to live in an uninsurable country a decade from now.”
More immediately, the mounting annual insurable damages have led to unprecedented inflation in Ontario insurance premiums.
And the inflationary trend is getting worse. According to Ratehub.ca users who requested and compared Ontario home insurance quotes online, the average rate across the province for 2023 was 11.7 % more than it was in 2022. In 2024 the rate increase climbed to 17.1% over 2023. This inflation on steroids is already costing Ontario homeowners collectively over $1 billion in additional premium costs every year. The extra costs will grow faster as the inflation rate rises.
And for many homeowners, the higher premium costs are the least of their worries. In 2021 the IBC reported that up to 10% of Canadian homeowners could not obtain flood insurance, a segment the IBC predicted will only grow.
It is an insurance crisis not limited to Ontario and Canada. Insurance payouts due to climate breakdown are rising around the globe. In its “Future Risks Report 2024” AXA, a global insurance giant, identified climate change as the “top concern of experts in every continent” for the fourth consecutive year. One US climate risk expert stated that “Insurance is the canary in the coal mine in regard to the climate crisis, and the canary is now just about dead.”
Yet Canadian insurance companies, including Definity Financial Corp and Fairfax Financial Holdings Ltd, continue to invest in fossil fuel projects that are the main source of rising greenhouse gas emissions. The five Canadian largest banks, all of whom operate insurance subsidiaries, are among the top global financiers of fossil fuels. No Canadian insurer has made a commitment to halt the underwriting of fossil fuel expansion.
The home insurance crisis is illustrative of the short-term thinking that ignores or magnifies the longer-term impact of climate breakdown. The business-as-usual attitudes that block effective climate action can be seen in persistent development of regions of severe weather risk – especially the risk of flooding in Ontario — that soon will become insurance no-go zones.
What steps has the Ford government taken to deal with the insurance crisis? Worse than none. It has maintained radio silence while withholding expert government reports that could assist Ontarian homeowners to adapt to the new climate and insurance normal. These reports provide a host of measures – such as flood maps and building-code enhancements – that would immediately reduce severe weather risk. And when risks decline, home insurance premium rates should soon follow.
If Ford really wanted to “Protect Ontario” as he claims in the current election, he would reverse his government’s attacks on environmental protections and renewable energy generation, both of which are fundamental to mitigating climate breakdown. He would put his back into advancing climate adaptation measures designed to truly protect Ontarians by keeping them safe and insured in their homes. Homeowners facing ever-growing insurance costs deserve better from their government.
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Kenneth Epps is a SCAN! member and retired from the staff of Project Ploughshares, the peace research institute of The Canadian Council of Churches. The views expressed here are his own.
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