Let’s face it, disasters such as wildfires, floods, and storms have dominated headlines everywhere. The consequences of these disasters are terrifying, but the cost of home insurance claims stemming from them is just as alarming.
Since 2019, Canada has seen a 115% increase in personal property damage claims. As a result, weather-related repair costs have surged by 485%. Nowadays, the cost of repairing a flooded basement is at least $43,000 out of pocket. To add to this, one home insurance claim can increase your premiums by 20%. Let’s take a look at what’s causing this surge in home insurance claim prices.
One Home Insurance Claim Can Up Your Premiums
According to data from Rates.ca, a single water damage home insurance claim can drastically increase your home insurance premiums. To be precise, an estimated $376 annually, or 19% of their overall premiums. This report draws on data from the Rates.ca Home Insuramap. The Insuramap uses weighted estimated averages from real home insurance claims across Ontario. To be more specific, it examines how much water and wind-hail claims add to annual premiums.
When Weather Becomes Expensive, So Do Home Insurance Claims
Unfortunately, we can’t control the weather, and homeowners are paying dearly for its consequences. Based on Rates.ca quoter data, a single wind-hail claim adds an average of $386 to the annual home insurance premium. On top of this, a water home insurance claim increases it by $376.
Since 2020, every year has ranked in the top ten worst years for insured losses from extreme weather, according to the Insurance Bureau of Canada. To add to this, Canada has seen a staggering 115% in personal property damage home insurance claims since 2019. We have also seen a 485% spike in the costs of repairing and replacing property damaged by weather.
According to Alex Walker, a program manager of climate finance at Environmental Defence Canada, insurance premiums have grown at a pace far above overall inflation.
“Since 2020, the home and mortgage insurance component of the Consumer Price Index (CPI) has increased by 27.36%, compared to 15.38% for overall inflation,” Walker told Rates.ca.
During the pandemic, replacement costs skyrocketed due to supply chain disruptions and higher construction expenses. According to Walker, premiums have outpaced even those increases. “This suggests that extreme weather has been a decisive factor in driving up insurance costs for homeowners.”
Flood Damage: The Main Cause Of Home Insurance Claims Across Southern Ontario
Overall, flooding has become the most damaging natural hazard in Canada, with water-related damages causing an average annual loss of roughly $800 million over the last decade. In particular, overland flooding is particularly damaging. This is when water enters homes through doors, windows, or cracks in the foundation.
“It is the single most common and costly natural disaster in Canada,” Walker says. Even so, Walker noted that only about 55% of Canadians have overland flood coverage. At one point, floods were considered 1-in-100-year events. Nowadays, they are happening more frequently. As damage and home insurance claims from these floods rise, so do home insurance premiums. In particular, cities in the southern part of the province are seeing the steepest increase.
Mississauga Seeing Rising Costs
As one of the largest cities in the Greater Toronto Area, Mississauga exemplifies how these factors converge to drive up home insurance costs. As of now, Mississauga ranks as the 6th most expensive city for home insurance in the region.
Where you live, particularly in Mississauga, may also change the price of any home insurance claim you may make. Spatial Analysis has revealed that repeated flooding is more concerning in low-lying areas and neighbourhoods that have older infrastructure. The neighbourhoods are ranked as follows:
- High-risk areas: Port Credit, Lakeview, Cooksville, and Clarkson.
- Moderate-risk areas: Erin Mills and Meadowvale.
- Low-risk areas: Lisgar and Churchill Meadows.
It is worth noting that low-risk areas also feature more modern construction and better elevation. This ends up mitigating flood impacts.
Supply and Demand Contributing to Expensive Home Insurance Claims
When severe weather strikes, a sudden surge in demand for repairs, materials, and services occurs. This overwhelms supply chains and drives up costs in high-risk areas. For example, the 2021 heatwave in British Columbia tragically resulted in 576 heat-related deaths between June 25 and July 1.
Simon Bernath is the founder and CEO of FurnacePrices.ca, a network of vetted HVAC contractors. According to them, there was a 200-300% spike in demand for air conditioning systems during this time.
“Because ACs were less common in the region, many people were unprepared,” Bernath says. He added that the lack of preparation likely contributed to the high number of deaths.
Materials To Repair Your Home Are More Expensive Than Ever
In the past decade, the cost of building single-detached homes has doubled. This is mainly due to softwood lumber prices, which tripled between June 2020 and May 2021.
The price of other materials also climbed. Steel, drywall, and basic supplies, such as piping, have seen steep increases. The second quarter of 2025 alone showed that plumbing materials rose by 3.7%. On top of this, HVAC supplies increased by 3%.
“Some of our partner contractors have seen a slightly higher increase in unit costs for the brands they sell. Roughly 5% compared to the typical average increase of maybe 3%,” Bernath stated.
He also added that parts have surged by as much as 20% annually. As a result, unit costs for many brands have climbed as high as 8%.
Home Insurance Claims: Conclusion
At the end of the day, the best way to be prepared is by having the proper home insurance. Even though filing a claim may increase your premiums, the out-of-pocket cost of repairs is far greater. If you are looking to switch providers or get a home insurance quote, please use the form below to contact us.
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