Recent Overview of Home Insurance in Ontario (2025)
1. Rising Premiums
- Home insurance premiums in Ontario have been increasing steadily. In Q1 2025, rates rose by approximately 5.7% year-over-year, though this is slightly lower than the double-digit growth seen in previous years.
- Over the last decade, premiums have increased dramatically—about 84% between 2014 and 2024, far outpacing inflation.
2. Impact of Extreme Weather
- Severe weather events such as floods, windstorms, and wildfires have caused significant insurance losses—over $9 billion in Canada in 2024 alone—driving up claims and premiums.
- Increasing frequency and severity of these natural disasters are putting pressure on insurers.
3. Regional Differences
- Home insurance is generally cheaper in urban areas like the Greater Toronto Area (GTA), with average annual premiums around $1,523 in Toronto.
- In contrast, northern and rural regions of Ontario face much higher rates, often 30% to 80% more, with some areas paying nearly three times the urban rates.
4. Rising Construction Costs
- The cost of building materials and labor has risen sharply, contributing to higher repair and rebuilding expenses for insurers, which in turn raises premiums.
5. Calls for Transparency and Regulation
- As premiums rise and coverage sometimes narrows, there is growing public demand for transparency in how insurers set rates and assess climate risks.
- Regulatory bodies like the Financial Services Regulatory Authority of Ontario (FSRA) are being urged to require insurers to disclose more information about pricing and risk factors.
6. Tips for Homeowners
- Shop Around: Use comparison tools to find the best home insurance rates.
- Increase Deductibles: Raising your deductible can lower premiums but be sure you can afford the out-of-pocket costs if a claim occurs.
- Add Coverage: Consider adding flood or windstorm coverage if you live in high-risk areas.
- Stay Informed: Keep up with regulatory changes and market trends to make well-informed decisions.
In summary, Ontario’s home insurance market is facing significant upward pressure on costs due to climate risks and construction expenses, with notable differences based on location. Consumers should carefully evaluate policies to balance cost and coverage.