Home insurance rates across Canada have increased by 5.28% so far in 2025, exceeding the general inflation rate, according to a study conducted by MyChoice, a Canadian insurtech company.
Data showed that while inflation in Canada declined to 1.9% in January 2025, the impact of extreme weather events continues to push premiums higher.
MyChoice used internal data combined with the Shelter Consumer Price Index to analyze insurance cost trends by province, including both recent changes and long-term shifts. It also examined how much more Canadians are paying for home insurance compared to a decade ago.
Alberta recorded the highest year-over-year increase, with rates rising by 9.07% in 2025. The province also experienced $4.1 billion in weather-related damages in 2024, the highest in the country. Other provinces with significant year-over-year increases include Manitoba at 6.67%, British Columbia at 5.89% and Ontario at 5.45%.
Homeowners in Alberta are paying an average of $660 more for home insurance in 2025 than in 2015. The increase is approximately $592 in British Columbia, $551 in Saskatchewan, and $519 in Ontario. Over the past decade, the average Canadian homeowner has seen annual home insurance costs rise by $421.
The growing impact of climate change on the frequency and severity of natural disasters in Canada is a key driver behind the expected rise in home insurance rates. In 2024, weather-related losses hit a record $8.5 billion, making it the most costly year in the country’s history. Among the largest disasters were the Jasper wildfires, which caused $1.1 billion in damages, and the Ontario flash floods in July, which resulted in $990 million in insured losses.
A global parallel to Canada’s climate challenges is unfolding in California, where insurers are scaling back coverage in high-risk areas.
After major losses from the January 2025 wildfires in Los Angeles, several large US insurers have withdrawn or restricted new policies in vulnerable regions. The situation worsened when California’s FAIR Plan, the state’s last-resort insurer, announced a $1 billion shortfall in covering wildfire claims. Regulators responded by requiring private insurers to shoulder half of the cost, with the remainder passed on to policyholders through a one-time fee.
These developments highlight the role of government intervention in maintaining insurance market stability when disasters become more frequent.
“As climate patterns grow more unpredictable, Canada isn’t immune. We’ve already seen insurers pull back in high-risk areas,” said MyChoice CEO Aren Mirzaian. “We need strong insurers and proactive government support – otherwise, coverage will become less affordable or less available in disaster-prone regions.”
