As Los Angeles grapples with one of the costliest natural disasters in U.S. history, insurers in Canada are wrestling with their own severe weather dilemma.
Driving the news: The Insurance Bureau of Canada is warning that premiums will likely rise significantly in 2025 after natural disasters caused a record-high $8.5 billion worth of damages in Canada last year — triple the losses compared to 2023.
- The summer of 2024 alone was more destructive than any calendar year on record, with over $7 billion in insured losses and over a quarter of a million claims.
Catch-up: Even before last year, insurance claims from natural disasters in Canada had more than quadrupled since 2008. To account for the added risk, Canada’s largest property insurer, Intact Financial, upped home insurance premiums by 9% last year.
Big picture: It's not just wildfires in remote areas causing rates to spike. Two of the costliest disasters in Canada last year happened in major cities: a $3 billion hailstorm in Calgary and a Toronto flood that caused just under $1 billion in damage.
Why it matters: Higher insurance rates will only add to the cost-of-living challenges facing Canadians. As natural disasters become more common — and premiums skyrocket — insurance could become financially inaccessible for much of the country.—LA