Climate change and increasing rebuild costs are driving up home insurance costs in Canada.

It’s no secret that home insurance rates are on the rise in Canada. With homeowners feeling the pinch across the county, it’s important to understand why rates are going up and what your options are to help keep your insurance premium affordable.

Climate Change

As climate change continues to cause temperatures to rise, more regions will have elevated exposure to natural disasters like fires, floods, and extreme weather events. This is having a major impact on the insurance industry forcing insurers to re-evaluate their policies and raise premiums to offset the increased risk. While there is no easy solution to this problem, companies and governments around the world are investing in reducing the risk of climate change.


Rising Rebuild Costs

The cost of rebuilding a home has increased due to several factors, including supply chain interruptions and inflation. The price of materials including lumber and siding have gone up because of shortages, and the cost of labour has increased as workers are in higher demand. As a result, the rebuild cost of homes has increased significantly over the past two years, making it more expensive for insurers to rebuild or repair homes after a loss.

The COVID-19 pandemic led to a boom in home renovations, as Canadians looked to upgrade their living space. The pandemic has caused many people to reassess their priorities, leading them to invest in their homes rather than in other areas, such as travel. If you made significant renovations or betterments to your home, your insurance premium may increase to cover the increased rebuild cost.


You may not be able to avoid these rising rates, but you do have options to help mitigate them. Discounts may be available if a house has a monitored security system or fire alarm, if the homeowner has not filed an insurance claim in several years, or if the insured has favourable credit. Home insurance premiums can also be lowered by increasing the deductible.

Of course, rising home insurance costs are just one more thing that homeowners must deal with these days, but by understanding the reasons behind the increases and working with an insurance broker to reduce your premiums, you can help offset some of the impact. Contact us to discuss your options.


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