Canada’s home insurance market could see premiums soar, coverage shrink, and availability decline by the end of the decade if governments and industry fail to push resilience measures, panelists warned at the National Insurance Conference of Canada (NICC).
David Sorensen (pictured left), deputy superintendent of insurance for Alberta, Kevin Lea (pictured centre left), vice-president of the Insurance Brokers Association of Alberta (IBAA), and Evan Johnston (pictured centre right), president and CEO of Wawanesa Insurance, each outlined what the market could look like by 2030 if nothing changes – and the steps needed today to keep insurance sustainable.
Sorensen told delegates that a do-nothing path will mean premiums keep climbing, fewer insurers stay active in the market, and policyholders are left with stripped-down products.
“If nothing changes, we’re going to have higher premiums, less availability of insurance, and more restrictive coverages,” Sorensen said. “With the severity and frequency of storms, and property values increasing in the way of climate-related risks, we’re going to see an increase in premiums and a draw in availability. I think that would be inevitable.”
The solution, he argued, has to start with construction standards and resilience. Governments must push tougher building codes, provide financing where needed, and ensure developers, insurers, and homeowners share responsibility for building back stronger. Just as important, he said, is helping consumers understand what risks they face and what steps they can take.
Lea warned that the very viability of home insurance as a product is at stake if coverage gaps continue to expand. Alberta’s experience with hail has shown how deductibles and exclusions chip away at protection until households are effectively left uninsured.
“If nothing changes, we’re going to be in a bad situation in 2030,” he said. “We’ll just see coverages (like we’re seeing right now with hail in Alberta) start to go away until the insurance product is just not really a viable solution that’s working for anyone.”
He pointed to repeated hailstorms in Calgary and escalating wildfire risks in the Mountain West as examples where insurers have pulled back, raising the prospect of other regions seeing similar erosion. Floods in Toronto or Montreal, or even a large earthquake in British Columbia or the St. Lawrence Valley, could trigger the same cycle of affordability crises and retreat.
Lea said the only sustainable way forward is through resilience – both in how homes are built initially and how they are rebuilt after disasters. That requires a mix of compulsion and support.
“The building codes and the rules around rebuilding are the stick,” he said. “But I also think there’s a role for government, particularly at the municipal level, to offer financing programs that allow homeowners to get the funds they need to pay that extra $20,000 or $50,000 to rebuild with Hardie board or metal roofing after the next hailstorm.”
Without such tools, he warned, most households will be unable to afford the upfront costs of resilient construction, even if long-term savings are clear. “We need to start looking at it realistically,” he said. “It’s not just about downloading the cost onto policyholders through deductibles or relying on government disaster funds. It’s about spending less money together on events we know are going to happen.”
Sorensen underscored that resilience requires investment, not shortcuts. “There’s no cheap solution,” he said. “Any real path to resilience, to addressing the underlying risks, is going to be expensive.”
He rejected the idea that rate regulation, such as California’s prior-approval system, could stabilize the market. “Rate regulation is not the solution,” he said. Instead, financing and policy support for risk reduction will be critical.
Johnston added that while industry leaders debate regulation, pricing, and long-term strategy, the impact is being felt by households already struggling with affordability.
“The decision that has to be made today is we can never forget there are real people,” Johnston said. “Sometimes, as we get more senior in organizations, we forget what happens at the front line. There are real people, and if we give up on finding solutions in leadership roles – whether as a carrier, broker, government, or provider – it will be those people who suffer.”
