How Extreme Weather Events are Shaping Home Insurance in Canada

In recent years, Canada has seen a sharp rise in extreme weather events, including devastating floods, hurricanes, and wildfires. As a result, homeowners are increasingly seeking guidance on how to protect their properties. Let’s take a closer look at how these events are impacting insurance policies and what you can do to make sure your home has the right coverage in place. 

The impact of extreme weather on home insurance in Canada 

Severe weather events are causing more damage to homes across Canada than ever before. From wildfires and flooding to hail and hurricanes, these natural disasters are placing more homes at risk, leading to a growing demand for home insurance that specifically addresses extreme weather.

With this rising risk, home insurance premiums have also been on the rise. The cost of insuring homes has increased as insurers account for the higher likelihood of weather-related claims. On top of that, inflation and soaring rebuilding costs have compounded the issue, pushing premiums even higher. As a result, homeowners are finding it more important than ever to carefully review their coverage to ensure they’re adequately protected without breaking the bank. 

What type of weather-related damage does home insurance cover?

A typical home insurance policy in Canada covers a range of weather-related damage, such as windstorms, hail, lightning, and forest fires. These policies generally protect your home and belongings from sudden and accidental damage caused by these events.

However, certain weather-related risks, like overland flooding and earthquakes, are often excluded from standard policies. To protect against these types of events, you may need to purchase additional coverage, such as flood insurance or earthquake endorsements, depending on where you live and the specific risks your home faces.

Provincial variances in weather risks and insurance needs

Weather risks can vary greatly across Canada, which means that insurance needs can differ from one province to the next. Here are some regional differences that may impact your coverage needs: 

• Ontario and Quebec: Severe weather events like flooding and wildfires can greatly impact home insurance needs. Homeowners often need additional coverage for water damage to ensure full protection against these increasing risks.

   

• British Columbia: The impact of forest fires and earthquakes significantly affects home insurance policies in BC. Many homeowners seek additional earthquake coverage, as this is not typically included in standard policies.

   

• Atlantic provinces (New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island): Hurricanes and coastal storms are a major concern in this region, influencing the cost and type of coverage homeowners require. Wind and water damage protection are essential for homes along the coast.

   

• Prairie provinces (Alberta, Saskatchewan, and Manitoba): Hailstorms and severe weather can cause significant damage to homes and agricultural areas in the Prairies. Homeowners may need to obtain additional protection against weather-related damages.

How governments and insurance providers are responding to extreme weather  

Government initiatives: Federal and provincial governments are increasingly stepping in to help Canadians manage the growing risks of extreme weather. Programs like the National Adaptation Strategy focus on strengthening infrastructure to better withstand extreme weather, while some provinces and municipalities offer grants or incentives to encourage homeowners to take preventive measures, such as installing sump pumps and backwater valves. These initiatives are designed to help reduce the burden on homeowners and insurers by mitigating potential damage before it happens.

What insurance providers are doing: Insurance companies are facing the challenge of rising weather-related risks while trying to keep policies affordable for homeowners. Some insurers may offer discounts for homes equipped with risk-reducing measures, such as storm shutters, hail-resistant siding, or fire-resistant roofing. However, with the increased frequency of claims due to extreme weather, maintaining affordable premiums is an ongoing concern, and some areas may see rising costs as the risks grow.

The rise of underinsurance  

As extreme weather events become more frequent, many Canadians are discovering they’re underinsured—either lacking sufficient coverage to repair or rebuild or not having the right policies in place. With rising construction costs and increasingly severe natural disasters, homeowners may face major financial losses if their insurance doesn’t fully protect them. It’s crucial to regularly review your policy to ensure you have adequate and appropriate coverage.

Tips for protecting your home from extreme weather   

• Review your policy: One of the most important steps you can take is to regularly review your home insurance policy. Make sure your coverage reflects the current value of your home and includes protection against the most relevant risks in your area.
• Consider add-ons: Explore additional coverage options that might be necessary for your region, such as overland flood insurance or earthquake coverage. These add-ons can offer vital protection against specific risks not included in standard policies.
• Mitigation measures: Take practical steps to reduce risks around your home. Consider flood-proofing measures, like installing sump pumps and backflow valves with battery backup in case of power outages, and remove flammable materials near your property to minimize wildfire risks. Simple actions can make a big difference in protecting your home.

Extreme weather and home insurance FAQs      

Does home insurance cover natural disasters like floods or wildfires?      

Standard home insurance policies generally cover certain events like wildfires, windstorms, and hail. However, floods are often excluded and may require additional coverage, depending on your location and the risks in your area.

What happens if my insurance doesn’t cover the full cost of damage from an extreme weather event?   

If your insurance doesn’t fully cover the damage, you may need to pay out of pocket for repairs or rebuilding. That’s why it’s crucial to review your coverage and ensure you have the necessary add-ons or endorsements to cover weather-related risks in your area.

How can I reduce my insurance premiums despite rising risks? 

To help lower your premiums, bundle your home and auto insurance, which often comes with discounts. Also consider installing home protection features like storm shutters, fire-resistant roofing, or a sump pump. Some insurers may offer discounts for taking proactive measures that reduce risk. Shopping around for an insurance quote can also help you find the best rates and ensure you’re not overpaying for your coverage.

Protect your home from the unexpected

With extreme weather on the rise, it's more important than ever to keep your home insurance policy up to date. With the right coverage in place, you’re not just protecting your home—you’re giving yourself peace of mind knowing you're prepared for whatever comes your way.

Let’s get you covered.  

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