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Climate Change Is Driving Up Your Home Insurance Premium. Here's What Ontario Homeowners Need to Know.

By Rob RoughleyNovember 11, 20218 min read

Ontario home insurance premiums have climbed roughly 84% over the past decade. That is not a typo. While general consumer prices rose about 28% over the same period, homeowners across the province have watched their insurance bills nearly double. The single biggest reason? Severe weather is getting worse, more frequent, and more expensive to clean up.

As brokers who have been writing home insurance in Durham Region since 1945, we have watched this shift unfold in real time. Water damage has overtaken fire as the leading cause of home insurance claims in Canada, and the gap keeps widening. Here is what is actually happening, how it affects your policy, and what you can do about it.

The Numbers Behind the Headlines

The Insurance Bureau of Canada (IBC) confirmed that 2024 was the costliest year for severe weather losses in Canadian history. Insured damage hit $8.5 billion — shattering the previous record of $6 billion set in 2016 after the Fort McMurray wildfires.

To put that in perspective: between 2006 and 2015, Canada's total catastrophic weather losses over the entire decade were $14 billion (adjusted for inflation). Between 2016 and 2025, the total was $37 billion — nearly triple the previous decade. That is not a blip. It is a trend, and it is accelerating.

The summer of 2024 alone accounted for more than $7 billion in insured losses and generated roughly 250,000 insurance claims nationally. That claim volume was 443% higher than the 20-year average.

Closer to home, the July 2024 flash floods that hit Toronto and southern Ontario caused nearly $940 million in insured damage and generated about 25,000 claims. It was one of the most expensive flooding events in Ontario history, second only to the 2013 Toronto flood.

Why Your Premium Keeps Going Up

Insurance works on a shared risk pool. Every policyholder contributes premiums, and those premiums pay for claims across the entire pool. When catastrophic losses spike, the math changes for everyone.

Ontario home insurance premiums rose 7.15% in 2025 — more than triple the inflation rate of 2.3% and above the national average increase of 5.3%. Northern Ontario communities were hit especially hard, with Thunder Bay seeing increases above 26%.

Several factors are compounding the problem:

More frequent severe weather. Intense rainfall events, windstorms, and ice storms are becoming more common across Ontario. The late-March 2025 ice storm that swept across Ontario and Quebec was a reminder that damaging weather is not limited to summer.

Higher rebuild costs. Construction materials and labour costs have surged. When a claim occurs, it costs significantly more to repair or rebuild than it did even five years ago. Insurers price for replacement cost, not original purchase price.

Reinsurance pressure. Canadian insurers buy reinsurance (insurance for insurance companies) on the global market. When worldwide catastrophic losses spike — hurricanes in the U.S., floods in Europe, wildfires in Australia — reinsurance costs rise, and those costs flow through to your premium.

Aging infrastructure. Many Ontario municipalities have stormwater and sewer systems that were designed decades ago for a different climate. When those systems are overwhelmed by rainfall that exceeds their capacity, the resulting sewer backups and surface flooding hit homes hard.

The Coverage Gap Most Homeowners Do Not Know About

Here is something that surprises many of our clients: a standard Ontario home insurance policy does not cover overland water flooding. If heavy rain causes water to pool on the surface and enter your home through windows, doors, or foundation cracks, that damage is not covered unless you have purchased an overland water endorsement.

Similarly, sewer backup coverage — which protects you when your municipal sewer system is overwhelmed and sewage backs up through your floor drains — is typically not included in a base policy. It is an add-on endorsement.

These are exactly the types of claims that are increasing most rapidly due to climate change. Yet according to a 2025 LowestRates.ca survey, 77% of Ontario homeowners have not added any endorsements to their home insurance policy.

The good news is that overland water and sewer backup endorsements are widely available and relatively affordable compared to the cost of an uninsured basement flood. A single water damage claim can easily run $30,000 to $100,000 or more. The endorsement that would have covered it might add $100 to $300 per year to your premium.

We recommend every Ontario homeowner carry both. If your current insurer does not offer overland water coverage at a reasonable price, talk to your broker about alternatives — this is exactly the kind of situation where having a broker shop the market for you makes a real difference.

What About Government Flood Insurance?

The federal government has been working on a National Flood Insurance Program in partnership with the insurance industry. The 2024 federal budget committed additional funding and set a target launch date of April 2025, aiming to provide affordable flood coverage for roughly 1.5 million high-risk Canadian households.

However, progress has been slower than anticipated. As of early 2026, the program has not fully launched. In the meantime, private-market overland water endorsements remain the best available option for Ontario homeowners. Do not wait for a government program to fill this gap in your coverage.

8 Practical Steps to Protect Your Home and Your Premium

You cannot control the weather, but you can reduce your home's vulnerability to it. Many of these improvements may also qualify you for premium credits with your insurer:

  1. Install a backwater valve. This device prevents sewage from backing up into your home when the municipal system is overwhelmed. Some Ontario municipalities offer rebates for installation. Check with your city.
  2. Add a sump pump with battery backup. A sump pump removes water that collects in your basement. The battery backup is critical — severe storms often knock out power, which is exactly when you need the pump most.
  3. Extend downspouts and improve grading. Downspouts should discharge at least six feet from your foundation. The ground around your home should slope away from the foundation so water drains away rather than pooling against it.
  4. Upgrade your roofing. Impact-resistant shingles reduce damage from hail and wind-driven debris. When it is time to reshingle, ask your contractor about Class 4 impact-rated materials. Some insurers offer a discount for them.
  5. Clear eavestroughs regularly. Clogged gutters cause water to overflow and run down the side of your home, pooling at the foundation. Clean them at least twice a year — spring and fall.
  6. Disconnect downspouts from the sewer system. In older Ontario homes, downspouts sometimes connect directly to the municipal sewer. Disconnecting them reduces the load on the sewer system and your risk of backup.
  7. Install a monitored alarm system. Water leak sensors, in particular, can alert you to a problem before it becomes catastrophic. Many insurers offer a discount for monitored security and leak detection systems.
  8. Review your policy annually. Do not wait for a claim to discover what is and is not covered. Sit down with your broker before each renewal to review your endorsements, your deductible, and your coverage limits.

The Deductible Conversation

One strategy worth discussing with your broker: raising your deductible. If you can comfortably absorb a $2,500 or $5,000 deductible on a smaller claim, a higher deductible can meaningfully reduce your annual premium. The savings compound year over year.

The trade-off is real — you pay more out of pocket if you do have a claim. But for many homeowners, the premium savings over several claim-free years more than offset the higher deductible risk. This is a conversation where your broker's advice matters, because the right answer depends on your financial situation and your home's specific risk profile.

What We Tell Our Clients

Climate change is not a future problem for home insurance. It is a current one. The $8.5 billion in Canadian weather losses in 2024, the nearly $1 billion in Ontario flood damage that July, the 84% premium increase over the past decade — these are the reality we are all working within.

But "your premium is going up" is not the whole story. The homeowners who are best positioned are the ones who are proactive: they carry the right endorsements, they invest in basic mitigation like backwater valves and sump pumps, and they work with a broker who understands their coverage and shops the market on their behalf.

If you are not sure whether your policy covers overland water or sewer backup, or if you want to talk through your options before your next renewal, reach out to our team. We have been helping Ontario homeowners navigate exactly these kinds of questions for 80 years, and we are always happy to review your coverage with you.

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