Advocates call for more transparency in home insurance rates amid rise in extreme weather

CBC

3 days ago

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As home insurance costs rise sharply amid increasing extreme weather events, one advocacy group is calling for more transparency from Ontario's financial services regulator into the increasing rates.
Investors for Paris Compliance says the rising frequency of floods and wildfires due to climate change is pushing rates toward unaffordable levels, and the province's home insurance sector needs to be investigated.
"There's been open-ended rate hikes, while at the same time there's been shrinking coverage due to the escalating costs of climate change," said Kiera Taylor, senior policy analyst at Investors for Paris Compliance.
"There's a lot of ripple effects, which really contribute to an affordability crisis and just more general instability in our financial system," she said.
Data shows, in 2024, insured losses from severe weather across the country exceeded $9 billion, said Brett Weltman, spokesperson for the Insurance Bureau of Canada (IBC). That figure is nearly three times higher than insured losses recorded in 2023, and more than 12 times the annual average of losses between 2001 and 2010, he said.
"Year over year, severe weather losses are rising at an alarming, exponential rate," he said in an email to CBC Toronto.
Investors for Paris Compliance has made a submission to the Financial Services Regulatory Authority of Ontario (FSRA) — an agency of the government of Ontario that protects the rights of consumers — asking for more transparency, including considering public disclosure of rate changes as is done with auto insurance.
The advocacy group is also asking the FSRA to make climate risk data public, such as flood maps, which insurers use to price risk. Currently, consumers only have access to public flood risk mapping which is often out of date, Taylor said.
Home insurance rates not under FSRA's authority
The FSRA said in a statement its authority under Ontario's Insurance Act includes licensing insurance agents, setting conduct standards and approving auto insurance rates — but not home insurance rates, as home insurance is not mandatory in Ontario.
But Taylor said the FSRA can require insurers to publicly disclose rate changes, even if it doesn't have the authority to regulate or cap them.
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Still, the FSRA says it has significantly increased its oversight of the property and casualty insurance sector. This sector includes insurance protecting people and businesses from financial losses due to property damage, theft, natural disasters and legal claims, according to the agency.
The FSRA published a report in June 2024 reviewing home insurance claims practices across the top 20 insurers in Ontario. The agency said it identified "several areas of concern" that were addressed directly with insurers.
These included irregular or insufficient communication with customers, and some companies not adequately tracking the reasons why claims are denied.
Homeowners need better access to risk information, Weltman said. The IBC is working with the FSRA "to determine mechanisms to share risk information," he said.
He said the insurance industry is also collaborating with the federal government to develop a flood risk portal.
But Taylor said without an analysis of Ontarians' threshold to continue paying for ongoing open ended hikes, the province could end up with a large portion of households unable to afford insurance at all.
"We need to see where the system breaks: how many homes, and at what price of insurance," she said.
Home insurance premiums rapidly increasing: Rates.ca
Ontario home insurance rates climbed 84 per cent between 2014 and 2024, according to analysis by My Choice Financial Inc., while for Canada as a whole rates climbed 76 per cent in the decade. The increases came despite Statistics Canada data showing inflation of 28 per cent over the period.
According to Rates.ca, home insurance premiums are rapidly increasing across the province, and flood risk plays a huge role.
Last year, Toronto was pummelled with close to 100 millimetres of rain in one day, which left dozens of homeowners dealing with insurance claims for flooded basements. Similar extreme weather events are only expected to continue due to climate change.
"We've seen in 2025 rates are already up around 5 per cent in the first quarter," said David Mayer, director of insurance markets at Rates.ca.
"So continue to shop your insurance before your renewal arrives and see if you can get a better deal."
If a consumer has filed a recent claim related to severe weather, Weltman said they should reach out to their insurance representative, who may be able to offer suggestions on steps they can take to better protect their property in the short-term.
But he said all levels of government should work together to strengthen municipal capacity to deal with natural disasters. This includes improving where and how building happens, such as by avoiding floodplains and using resilient materials, he said.
In a statement, a spokesperson for the Ministry of Finance said the department is working with FSRA "to monitor the situation closely and ensure homeowners are receiving the best possible options."
"We are also in regular contact with the insurance industry to discuss options to support homeowner insurance," Scott Blodgett said via email.