Auto and property rates hardening is a trend that is continuing into 2026. Canadian home and auto insurance premium rates continued to rise into 2025 and early 2026, according to ongoing statistics from the Applied Systems Rating Index and broader industry data. Though not as sharp as the spikes seen in 2023-2024, the market remains in a hardening phase.
Auto and property insurance rates are rising due to higher repair costs, increased auto theft, extreme weather events, labour shortages, and rising construction costs. While rate increases have slowed since 2024, the market remains in a hardening phase into 2026.
Auto and Property Insurance Rate Hardening: Common Questions Answered
Why Are Insurance Rates Increasing In Canada?
Insurance rates in Canada are increasing due to a combination of factors. This includes inflation, climate-related losses and higher repair and rebuilding costs.
Will Insurance Rates Go Down In 2026?
Rates are expected to stabilize in 2026. However, they are not expected to decrease, as insurers are continuing to adjust to long-term risks.
Which Provinces Are Most Affected?
Ontario and British Columbia are seeing the biggest increase in insurance rates. This is due to both climate exposures and the cost of building.
How Can I Lower My Insurance Premiums?
There are multiple ways you can lower your insurance premiums. This involves bunding policies, increasing deductibles, and installing safety systems to reduce costs.
Auto and Property Rates Hardening: What Is Causing It?
The Applied Rating Index, which analyzes completed quotes across more than 80% of the Canadian brokerage market and hundreds of insurer rate filings, continues to show elevated premium levels nationwide.
Although the pace of increase has slightly slowed down compared to 2024, both auto and home insurance are experiencing year-over-year growth into 2026. Auto and property rates hardening is continuing into 2026, so let’s see why.
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How Much Is Auto Insurance Increasing In Canada In 2026?
After a sharp increase in 2024, auto rate growth has stabilized. However, it remains at a higher price, increasing by 6-9% annually through 2025 and into 2026, depending on the location and driver profile.
It is well-documented that several factors contributed to rising costs for insurers, including:
- Increased auto theft rates (especially high-value vehicles)
- Higher vehicle repair costs due to advanced technology
- Labour shortages in repair shops
- Increased cost to replace advanced technologies in cars
- Supply chain disruptions are affecting parts availability
Decrease in Auto Crime
According to the Equite Association, theft declined in many parts of 2024. However, organized auto theft networks remain a major concern even now in 2026. This is particularly true for high-value vehicles and exports. As a result, insurers continue to factor theft risk into insurance premiums.
How Much Is Home Insurance Increasing In Canada In 2026?
Whether you own your home, rent, or live in a condo, with auto and property rates hardening, many Canadians can expect their home insurance rates to remain on the steeper side this year. Home insurance rates have continued to rise, though at a slower pace than auto insurance rates. Compared to the 9.9% increase in 2024, property rates have grown approximately 5-8% annually into 2026. Ontario and British Columbia remain the most affected by climate exposure and the cost of rebuilding.
What are the key factors driving up home insurance rates?
When assessing the reasons behind the hardening of personal home and auto rates in the first half of 2024, it is impossible not to take into account the effects the pandemic and extreme weather have had on Canada over the past few years. Let’s take a deeper look at how these factors influence home insurance premiums.
1. Extreme Weather Events and Catastrophes
A primary driver of rising insurance costs remains severe weather. In recent years, Canada has seen:
- More frequent and severe flooding events
- Record-breaking wildfire seasons
- Increased hail and windstorm damage
Overall, insured catastrophe losses have consistently exceeded the historical average, with many billion-dollar years since 2023. Insurers are now pricing in forward-looking climate risk, not just historical losses.
2. Rising Material Costs
Another key consideration when pricing property coverage is the cost to repair or rebuild a home in the event of a loss. These costs have risen significantly during the pandemic because of numerous factors:
- An increase in demand for home renovations.
- An increase in demand for new construction.
- Supply chain disruptions in Canada and worldwide.
These factors, combined, have led to limited supplies and inflated prices for most building materials.
3. Job Openings in Skilled Labour
New home and renovation projects may be surging, but the construction industry is facing a labour challenge. Many skilled workers retired, and others exited the industry during the pandemic. With more skilled labour needed and fewer people available to meet the demand, the cost to complete projects rises.
The construction and skilled trades sectors are still facing multiple labour gaps. As a result, this continues to:
- Increase rebuild times
- Drive up claim costs
- Add pressure to insurers’ pricing models
Controllable Factors Impacting Your Home Insurance Rate
Current market conditions that affect your insurance premiums may be out of your control. However, there are steps you can take to help keep the cost of your property coverage in check:
1. Take steps to prevent losses
Be sure to check with your insurance broker about any savings you may qualify for from the preventative measures you take. For example, Travellers offers insurance premium discounts for centrally monitored burglar and fire alarms.
2. Review your insurance
Ask your isure broker to review your current coverage to ensure that you are getting the customized protection you need. Make sure all home improvements are accounted for. Cancel or reduce coverage you no longer need.
3. Include credit
Many insurance companies across Canada use your credit score as a factor when calculating your home insurance premiums. This discount is only available when you provide your credit consent.
4. Increase your deductible
A higher deductible will likely reduce your premium. Just remember to have enough savings to cover your deductible should you experience a loss.
5. Bundle your coverage
Many insurance companies offer discounts when you purchase more than one policy with them. Home and auto insurance are often bundled for a discount. However, discounts may also apply if you insure your boat, cottage, or other investment properties under the same policy.
6. Look for customer retention programs.
Some insurance companies reward loyal customers with a discount. Inquire with your insurer or isure broker today!
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Auto and Property Insurance Rates Are Hardening: What Comes Next?
There are various causes for personal auto and property rates hardening in the first half of 2024. Catastrophic weather events are on the rise. Pandemic-era disruptions, including shortages in building materials and skilled labour, are driving rate changes. But there are factors within your control when it comes to the premiums you pay. It’s smart to take advantage of them! Contact one of our isure representatives to discuss options to help make your personal home and auto premiums more manageable.
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