Ontario homeowners are facing rising home insurance premiums that are well above the inflation rate, as the province contends with the financial fallout from extreme weather events and increasing rebuilding costs.
Premiums Surge by 7.15% in 2025
In 2025, the average home insurance premium in Ontario rose 7.15% compared to the previous year, more than triple the national inflation rate of 2.3% and significantly higher than the national average of 5.3% for insurance premiums. Over the past decade, home insurance costs in Ontario have skyrocketed by 84%, far outpacing the general consumer price inflation of 28% during the same period.
Climate Change-Driven Damages
This sharp increase in premiums follows a record year for insured losses in Canada, driven by extreme weather events. In 2024, the country saw $8.5 billion in insured damages, marking the highest insured loss total on record. Notable weather events contributing to this total include:
Jasper wildfires, which caused $1.1 billion in damages.
Ontario’s summer flash floods, leading to nearly $940 million in insured losses.
The surge in extreme weather events, exacerbated by climate change, has put an immense strain on Ontario’s home insurance system, driving up premiums across the province.
Regional Premium Hikes Across Ontario
A recent study by MyChoice, an insurtech company, analyzed home insurance quotes across Ontario municipalities from January to September 2025. The study revealed significant variations in premium increases across different regions:
Northern Ontario saw some of the largest hikes:
Thunder Bay: 26.39% increase.
North Bay: 22.64% increase.
Huntsville: 19.72% increase.
Kenora, Timmins, Sudbury (higher wildfire exposure): Above-average increases.
Flood-prone areas also experienced steep hikes:
Pembroke: 22.17% increase.
Ajax: 22.11% increase.
Ottawa: 14.30% increase.
Mid-sized cities saw double-digit increases:
Brockville: 16.77% increase.
Burlington: 15.97% increase.
Belleville: 14.26% increase.
Larger centers like London, Windsor, and Mississauga also saw significant increases.
However, not every area experienced the same pressure. Some municipalities, including Gravenhurst, Innisfil, and Welland, saw little to no change in premiums. A few even recorded declines, such as Woodstock (−5.86%) and Waterloo (−5.11%).
Factors Driving the Surge
Several key factors are contributing to the rising premiums:
Construction costs remain high due to supply chain issues and increased labour expenses, making rebuilding homes more expensive.
Water damage has become the most common type of home insurance claim in Canada, testing aging infrastructure across Ontario.
Reinsurers have increased prices after heavy global losses in 2023-24, leading to higher costs for primary insurers, who in turn pass these costs onto consumers.
Implications for Homeowners and the Insurance Market
The increasing premiums pose a growing challenge for homeowners, especially those in high-risk areas, such as flood- and wildfire-prone regions. Insurers are tightening their pricing models, relying more heavily on granular risk data to set rates, while homeowners may face increased pressure to:
Invest in mitigation measures (such as flood barriers or wildfire-resistant materials).
Shop around for competitive rates to offset the rising costs.
Affordability Concerns
Without significant intervention, the affordability of home insurance could become a central issue for Ontario homeowners. The study suggests that as premiums continue to climb, many households may struggle to afford coverage, particularly in higher-risk areas.
Ontario’s home insurance market is navigating a challenging landscape, driven by climate pressures, higher construction costs, and more frequent extreme weather events. Homeowners will need to stay vigilant about rising premiums, while insurers may need to find more sustainable pricing models to ensure that insurance remains accessible for all.
Related topics:
