California Wildfires and Global Disasters Are Driving Up Home Insurance Costs in Canada

The devastating wildfires in California have highlighted the growing impact of climate change on the insurance industry. In recent years, major insurers have pulled out of high-risk areas, citing unsustainable losses. This has created a ripple effect across the global insurance market, forcing companies to reassess risk and raise premiums—even in other geographical locations.

In Canada, the Insurance Bureau of Canada (IBC) reports that severe weather caused $3.1 billion in insured damages in 2022, making it the third-worst year on record. Rising claims have led to skyrocketing reinsurance costs, with global reinsurers increasing premiums by 25% to 100%. These higher costs are being passed down to homeowners, with Statistics Canada reporting an 8.2% increase in home insurance premiums nationally as of June 2023.

The rising costs aren’t just a result of local events—climate disasters worldwide are putting further pressure on the industry. Major Canadian insurers have also been criticized for investing heavily in fossil fuel production, despite the increasing climate-related risks. This paradox has contributed to higher claims and escalating premiums for policyholders.

In response, the Canadian government is developing a National Flood Insurance Program to ensure affordable overland flood coverage. However, experts argue that broader climate-related disasters, such as wildfires and windstorms, which are becoming more frequent, must also be addressed.

As climate change drives more extreme weather events worldwide, Canadians should prepare for rising insurance premiums and evolving coverage options. Regular policy reviews and staying informed are key to ensuring adequate protection.

Read more on CTVNews.ca

Scroll to Top