Home insurance costs in wildfire-prone areas of Canada are rising sharply, with premiums in some cities now accounting for nearly one-fifth of mortgage payments, according to a study by insurance comparison platform MyChoice and real estate firm Wahi.
The analysis of quotes from January to June 2025 compared with the same period in 2023 showed the steepest increases in Alberta and British Columbia. In Medicine Hat, annual premiums rose 24% to $3,875, now equal to 19% of a typical mortgage payment. Wood Buffalo, which includes Fort McMurray, recorded a 37% rise to $3,367, accounting for 16% of mortgage costs. Kamloops, B.C., saw premiums nearly double over two years, reaching $3,743, or 9% of a typical mortgage.
Nationally, home insurance premiums increased 12% to an average of $1,043 in 2025, equivalent to about 2% of mortgage payments. However, the averages mask sharper affordability pressures in high-risk regions, particularly across Alberta, British Columbia, and northern Ontario.
The report also found that premiums are increasing faster than housing values in wildfire zones, raising affordability concerns. In Ontario, Kenora and Timmins showed notable jumps, with insurance representing 11% and 14% of mortgage payments, respectively.
Industry data suggested climate risk is becoming a growing driver of insurance costs. Catastrophic wildfire seasons have made reinsurance more expensive, adding to underwriting pressures.
While Canadian insurers continue to provide coverage in high-risk areas, parallels are being drawn to the US market, where State Farm, Allstate, and others have reduced their exposure in California due to wildfire losses.
Earlier this year, Aviva Canada withdrew from Alberta’s direct home and auto insurance market, citing regulatory and climate pressures. Analysts warn that affordability challenges could evolve into availability issues if risk levels continue to rise, prompting discussions on whether governments may need to consider backstop programs similar to flood and wildfire pools in other jurisdictions.
