Canada has recorded $7.1 billion in insured losses from natural disasters during the summer of 2024, marking the highest quarterly total on record, according to a report from The National Observer.
The spike is adding pressure on the property insurance sector as it adjusts pricing and risk exposure in response to climate-related events.
“This was the most devastating quarter in our country’s history for insured losses,” said Jason Clark, chair of Climate Proof Canada and director of climate change advocacy at the Insurance Bureau of Canada (IBC).
Insurance premiums are rising in tandem with the losses. According to Statistics Canada, property insurance rates for new homeowners have increased by 78% since 2015. Insurers cite growing weather-related risk as the driver. One homeowner in Aurora, Ontario, said his annual premium jumped from $1,400 to $2,200 following national adjustments related to recent storms.
IBC said rate increases reflect risk. “Across the country, we are seeing an increase in the frequency and severity of severe weather events,” the bureau said in a statement.
Some insurers are also reducing coverage in high-risk areas. While the Canadian market has not seen widespread withdrawals, as in parts of the US, insurers are increasingly using exclusions, higher deductibles, and policy limits to manage exposure. The moves have raised concerns about future affordability and access to coverage, particularly in regions prone to floods and wildfires.
In response, the federal government is developing a national flood insurance program, supported by $15 million in initial funding from Budget 2024. The plan includes a federal reinsurance backstop and aims to ensure coverage for high-risk households. IBC has called for additional investments, including $2 billion for disaster mitigation and adaptation.
At the same time, the industry is promoting risk awareness through marketing campaigns. Since May, IBC has spent over $150,000 on social media ads about severe weather, directing consumers to a site offering home protection tips and advocating adaptation policies.
Jason Thistlethwaite, a professor at the University of Waterloo, said such campaigns may shift accountability from insurers to governments and homeowners. He warned that rate increases are likely to continue and may widen the “protection gap” for those unable to afford coverage or invest in mitigation.
Flood and fire risk data remain limited for many consumers. A federal mapping initiative aims to improve public access to this information, working with insurers to produce new tools. Still, researchers say only a small percentage of at-risk Canadians know their exposure.
Meanwhile, criticism is growing over the industry’s investment practices. A 2024 report from Investors for Paris Compliance found Canadian insurers hold nearly $20 billion in fossil fuel investments. The group has filed a complaint with Ontario’s regulator, arguing insurers are shifting the financial burden of climate-related losses onto taxpayers.
