Why Did Canadian Home Insurance Rates Rise in 2024?
Published on November 15, 2024 | Blog Post by Tracy
Home insurance premiums across Canada saw a noticeable rise in 2024, largely driven by inflation, climate events, and increased demand for renovations. According to RatesDotCa, Canadian homeowners experienced an average rate hike of 5% this year. In Ontario, for instance, the average annual premium jumped from $1,342 in 2021 to $1,409 in 2022—a near $70 increase for the same coverage.
What’s Causing the Increase?
Multiple factors contributed to this surge, including:
1. Inflation and Its Ripple Effect
Inflation has had a widespread impact across all sectors, including home insurance. Canada’s Consumer Price Index (CPI) tracks the cost of everyday goods like food, housing, and transportation. In June 2022, inflation peaked at 8.1%, the highest in nearly 40 years. This spike raised prices for essential items—especially building materials—which, in turn, increased the cost to insure homes.
2. Pandemic-Driven Home Renovations
The pandemic transformed our homes into offices, classrooms, and gyms, prompting many homeowners to renovate. More than 213,000 residential renovation permits were issued in 2021, according to StatsCan. These upgrades raised property values and replacement costs—key factors that drive insurance premiums higher.
3. Rebuilding Costs and Supply Chain Issues
Supply chain disruptions and rising material costs, especially lumber, made home rebuilds significantly more expensive. Insurance-paid rebuilds also follow strict timelines, increasing costs further. These higher rebuild expenses are reflected in your premium.
4. Climate Change and Extreme Weather
Severe weather events have become more frequent and costly. In 2022, flooding in British Columbia alone caused over $450 million in insured damage. From wildfires and hailstorms to hurricanes and tornadoes, these natural disasters are escalating risks for insurers, who must raise premiums to cover losses.
What You Can Do to Lower Your Premiums
While you can’t control inflation or weather, there are ways to reduce what you pay:
Increase Your Deductible
A higher deductible typically lowers your annual premium.Take Advantage of Discounts
You might qualify for discounts if you have a security system, smoke detectors, or a claim-free history.Use a Soft Credit Check
A good credit score may qualify you for a lower rate without affecting your score.Bundle Policies
Combine your home and auto insurance with the same provider for extra savings.Check for Group Discounts
Some employers or alumni associations offer group insurance rates.
Tip: Review your policy annually and inform your broker about any home upgrades. Ask about any new discounts you might qualify for.
Still Have Questions?
If you’re unsure how these changes affect you or want help lowering your rates, get in touch with us. We’re here to help you navigate your home insurance with confidence.
