The Rising Tide of Insurable Losses in Canada: A Decade of Change

In the past decade, Canada has witnessed a staggering 379% increase in annual average insurable losses (AAIL) compared to the prior 30-year average, according to a new study from Insurtech MyChoice Financial. This dramatic rise underscores the growing impact of natural disasters on the insurance landscape across the country.

Provinces like Alberta and Saskatchewan have been hit particularly hard, experiencing massive increases in AAIL of 495% and 302%, respectively. Ontario also saw a significant rise of 89% over the last decade. In contrast, New Brunswick and Nova Scotia experienced decreases of 87% and 24%, respectively.

The study analyzed how insurable losses from natural disasters have changed over the last 40 years across Canada. Using data from the Canadian Disaster Database, the team compared the 10-year average of disaster-related annual insurable losses against the prior 30-year average, adjusted for inflation. They also examined Shelter Consumer Price Index data from the past 10 years to determine home insurance inflation across Canada and compared it to current rates from the MyChoice quote database.

Interestingly, some provinces did not see an increase in climate-related damages but still experienced home insurance inflation. This phenomenon is attributed to the overall risk of increased climate-related damages being absorbed across the country. As a result, average home insurance premiums jumped 76% across Canada in the last decade, rising from an average of $539 in 2014 to $948 in 2024.

Saskatchewan and Alberta saw the highest increases in home insurance premiums, with Saskatchewan experiencing a 106% rise (from an average of $491 in 2014 to $1,012 this year) and Alberta seeing a 90% increase ($696 in 2014 to $1,324 in 2024). Quebec and Prince Edward Island had the lowest increases, although they were still significant — 46.5% in Quebec and 57.2% in PEI.

MyChoice estimates that climate-related disasters have cost the average Canadian about $409 a year in increased home insurance premiums over the last 10 years. This highlights the financial burden that natural disasters are placing on homeowners and the importance of understanding and mitigating these risks