Ontarians are paying more for less as climate change hits insurance rates: advocates are demanding answers

Peel residents, already feeling the strain of rising property taxes, and some of the highest auto insurance rates in the province, depending on where you live in the region, are now facing skyrocketing home insurance rates in the face of extreme weather events, with insurers providing little transparency on the reasons behind the increases. 

One advocacy group is calling out this lack of accountability and “information asymmetry”, asking the Province’s financial regulator to intervene. 

In July, Investors for Paris Compliance (I4PC) filed a complaint with Ontario’s Financial Services Regulatory Authority (FSRA), urging the government to demand greater transparency from insurers, particularly about how climate risks are being priced, how premiums are determined and the lack of public analysis regarding whether Ontarians can continue to afford these escalating costs.

“Unlike with auto insurance, home insurance rates are a black box – Ontarians only know they keep going up,” I4PC senior policy analyst Kiera Taylor said, noting the group identified a “giant systemic risk going unaddressed by both the industry and regulators” when assessing broader industry trends and how the insurance industry was dealing with climate risk overall.

Ontarians have been increasingly vocal about the steep rises in home and auto insurance premiums, with many expressing frustration over significant year-over-year hikes. Despite no changes to their coverage or claims history, residents are reporting increases of $100 or more per month, which far outpace inflation. Homeowners and drivers alike are questioning the reasons behind these increases, with insurers citing factors such as rising collision coverage costs, increased auto theft and the financial impacts of climate-related damages.

(Reddit)

“Due to accelerating climate damages, premiums are just going up with no end in sight. That’s not a sustainable solution because climate change is here to stay, damages will get worse and people won’t be able to afford exponentially increasing premiums. Right now, the only real solution being discussed is adaptation, but we can’t adapt our way out of climate change.”

Between 2014 and 2024, home insurance rates in Ontario increased by an average of 84 percent, with a 12.7 percent rise in 2024 alone.

The Insurance Bureau of Canada (IBC) says climate change influences more and bigger floods, wildfires, hailstorms and windstorms, which are costing billions and putting people and property at risk. 

In 2024, insurers paid out over $9 billion, surpassing the previous record set in 2016 by more than $2 billion. 

The flash flooding in the Greater Toronto Area (GTA) alone led to nearly $1 billion in insured losses, affecting homes, businesses, and vehicles.

“It’s estimated that for every dollar insured, there were $3–4 in uninsured losses. So, that’s $3–4 billion out of pocket for folks in the GTA,” Taylor noted.

As the costliest year on record for insurance payouts in Canada, driven by a series of devastating weather-related disasters, insurers had warned that rates could climb even further in 2025.

As predicted, premiums have already risen by an additional 5.7 percent in 2025 so far.

In the second quarter of 2025, Ontario saw the biggest rise in insurance premiums for both auto and home insurance. Compared to the same time last year, average premiums for auto insurance in Ontario increased by 18.5 percent, the highest jump among all provinces. For home insurance, Ontario experienced a notable increase, though Quebec saw the largest rise at 10.1 percent.

(Applied Rating Index)

The complaint from I4PC highlights how Ontario's auto insurance system offers more public transparency than the home insurance sector. FSRA publishes rate changes and justifications for auto policies, but no similar system exists for home insurance.

In 2025, the average cost of home insurance in Mississauga is around $1,470 per year, or about $123 per month. In Brampton, it's approximately $1,352 annually, equating to about $113 monthly, according to Rates.ca.

Many communities in northern Ontario, particularly rural communities, pay 30 to 80 percent more for their home insurance than cities around southern Ontario.

An estimated 10,000 Canadians have turned to crowd funding platforms like GoFundMe between 2019 and 2023 to cope with uninsured climate-related damages. Yet, there’s still no public analysis of whether homeowners can afford the rising costs, a gap the FSRA is being asked to address.

A Toronto woman, devastated by the aftermath of the intense rainfall on July 16, turned to GoFundMe after her basement apartment was flooded with sewage. The flood caused by overflowing drainage systems submerged her belongings, including important sentimental items, and destroyed a third of her possessions. In her GoFundMe appeal, she shared the heartbreak of losing irreplaceable mementos that helped her cope with homesickness since moving from Vietnam. Despite the emotional toll, she expressed gratitude for any support to help her recover and rebuild her life.

(GoFundMe)

But these rising premiums are only half the story. Taylor notes coverage is also shrinking, especially in flood-prone zones like Windsor, Richmond Hill, and Ottawa, where some policies exclude flood damage altogether.

According to the Toronto and Region Conservation Authority’s map viewer, any property that falls within the blue shaded areas, like the flood-prone Dixie-Dundas cluster near Dixie Road and Dundas Street East in Mississauga, could be at risk of flooding.

(TRCA)

“Some areas are becoming uninsurable…People are paying more for less protection, and they’re not even told what risks they face because flood and fire maps used by insurers, used to price risks, are proprietary,” she said.

“Consumers and even governments don’t have access to the same data that insurers use. There’s a complete information asymmetry. How can regulators or governments make informed decisions when they don’t have access to the information companies are using to price our physical risk?”

A Mississauga resident took to Reddit to voice their frustration after severe storms in 2024 left significant damage to their property. The resident shared that water entered their home through the sewer drains rather than from walls or windows, causing extensive damage to their finished basement, including destroyed floors, baseboards, and appliances. Despite reaching out to both the City of Mississauga and the Region of Peel, they were met with denials of responsibility, with officials attributing the flooding to an overloaded stormwater system and labelling the event as a "once in 100 years" occurrence. Adding to their frustration, the resident reported that their insurance claim had been left unanswered, and they had not received any response from their local councillor.

(Reddit)

In Canada, about one in 10 households live in flood-prone areas but struggle to obtain flood insurance. 

Insurers, facing high costs due to frequent and severe flooding, often do not offer flood coverage in these regions. When coverage is available, premiums are typically very high, a 2024 report by the Canadian Climate Institute highlights. 

In 2022, Public Safety Canada and a federally convened task force estimated that 90 percent of Canada’s $2.9 billion in annual flood damage occurs in the 10 percent of homes most at risk. 

The majority of these 1.5 million homes are not insured against flooding because private insurance companies cannot offer affordable policies without the risk of payouts exceeding premiums. 

As a result, homeowners either pay for the damages themselves or rely on government disaster assistance if the flooding is deemed severe enough—similar to what happened in Mississauga last year when two, once-in-a-century storms hit the city in the span of one month, leading the City of Mississauga to launch relief programs to help pay for damages. 

I4PC also exposes a troubling contradiction; insurance companies warn of climate risks, but they also invest in and underwrite fossil fuel companies, whose activities contribute directly to worsening climate events.

A 2024 report by I4PC notes the insurance industry perpetuates a harmful cycle by insuring and investing in fossil fuel companies, which drive climate change and fuel extreme weather damage. As claims rise, so do premiums, and taxpayers are left shouldering the cost of damaged infrastructure. 

(Playing with Fire/I4PC)

I4PC’s 2024 report, Playing with Fire, highlights that the seven largest Canadian-based insurers and their parent companies held over $19.5 billion in fossil fuel investments. Some, like Fairfax, are even among the top global underwriters of fossil fuel projects.

“They’re profiting on both ends, contributing to climate damage and then passing the costs onto consumers. That’s a systemic conflict of interest,” Taylor said.

“Insurance companies are still increasing shareholder dividends, which signals profitability. Meanwhile, governments are footing more of the disaster bill, and consumers are left with unaffordable premiums.”

Despite rising climate-related claims, Canadian insurers continue to fund fossil fuel projects, worsening climate risks. Fairfax, a key player, underwrites major fossil fuel initiatives globally. While some insurers like Intact are moving toward exclusion policies, the industry lacks a unified, credible plan to phase out fossil fuel support and align with net-zero goals.

(Playing with Fire/I4PC)

Are insurers knowingly continuing practices that exacerbate the problem?

“Yes,” Kiera Taylor said without hesitation.

“I think they’ve been doing business the same way for a long time, and there’s a resistance to change.” 

Both homeowners and renters are impacted, as rising insurance premiums often lead landlords to pass the costs onto renters through higher rent, even if they pay for their own insurance.

I4PC is now calling on FSRA to conduct a thorough investigation into the industry’s climate risk practices, net-zero alignment and whether Ontario’s home insurance market is sustainable.

Taylor says I4PC has yet to receive a response from FSRA as of July 30. “We hope to get some kind of written reply, but I’m not getting my hopes up,” she said.

Ultimately, Taylor believes the issue is part of a broader affordability crisis unfolding across Ontario. Residents are feeling their budgets tightening, but not many connect the dots between rising insurance costs and climate change.

“People are feeling squeezed by everything: rent, property taxes, insurance. It all adds up and just gets bucketed in with the broader affordability crisis. But what’s missing is any clear acknowledgement from insurers or the province that climate change is a root cause,” she noted.

“We need greater transparency about what’s going on, and a plan by the regulator to get on top of growing home insurance unaffordability in the face of increasing climate damages.”

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