Flooded streets and property are seen along the Gull River in Minden, Ont., on April 16.Fred Thornhill/The Canadian Press
Flood risk has become the biggest driver for home insurance spikes of more than 20 per cent in some Ontario cities, and the product now accounts for a growing portion of a homeowner’s monthly expenses, according to new data.
The findings are part of a joint study by insurance technology company MyChoice and digital brokerage Wahi released this week, which measured home insurance rates between 2024 and 2026.
The annual insurance premium in Ajax, which had the highest flood risk score in the study at 4.6 out of 5, increased by 26 per cent to $1,290 in that period.
Markham, which had a flood risk of 3.9 out of 5, saw rates climb by 22 per cent to $1,505, while Brockville climbed by 21 per cent to $1,288.
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The Wahi and MyChoice study generated insurance estimates for the study by using the profile of a 35-year-old owner of a semi-attached or detached home with enhanced water protection and no claims history. Flood risk scores were determined with data from the federal government that considers factors such as precipitation, proximity to rivers and terrain characteristics.
“The double-digit increases for Ontario are quite high and well above general inflation numbers,” said Vitalii Starov, vice-president of product growth at MyChoice.
Insurance rates have been rising rapidly across Canada as providers respond to major weather events that are becoming increasingly common. Insurance experts say the premium increases are also a result of labour shortages, high gasoline prices and increasing materials costs that have led to elevated building and repair expenses.
“Everything is pointing towards higher insurance rates, and the tariff war, which is raising the prices of aluminum and steel, which are key elements in building,” said Mr. Starov.
“The overall cost of building has gone up, even as the cost of a home comes down.”
Potential homeowners have faced rising mortgage rates, increasing property taxes and climbing insurance fees that are offsetting the impact of lower home prices.
Rising rates were especially notable in smaller towns, where insurance premiums are accounting for a larger part of a homeowner’s monthly cost.
In Sault Ste. Marie, insurance payments were equal to 12 per cent of a mortgage payment after premiums rose by 15 per cent between 2024 and 2026. In Sudbury and Belleville, insurance was equal to 7 per cent of a mortgage payment.
Home insurance is usually a relatively cheap product, and those numbers are higher than normal for some major cities in the GTA, where monthly insurance costs equalled just 2 per cent of a mortgage payment.
The increases follow many years in which a high number of expensive weather-related disasters took place.
Floodwaters surround a house and vehicles in Abbotsford B.C., in December, 2025.ETHAN CAIRNS/The Canadian Press
In 2024, major flooding in Toronto and across southern Ontario resulted in more than $900-million in insured losses. The Insurance Bureau of Canada said the country experienced $9.4-billion in losses due to weather nationwide that year, which represents a 443-per-cent increase compared to the 20-year average and was the worst year on record.
2025 was less severe, with $2.4-billion in losses, but it was still the 10th worst year for weather disasters on record. Eight of the worst years for insurance payouts have occurred in the past decade, according to IBC statistics.
Higher insurance costs also come as interest rates are further affecting the affordability of a home.
Liam McGuinty, the IBC’s vice-president of federal affairs, said rising home insurance prices are a signal that flood risk is outpacing efforts to defend against major weather events.
“We have to have a much stronger focus on resilience policy if we hope to bend the curve,” said Mr. McGuinty.
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He said the IBC has called on governments at all levels to develop better flood maps, help fund municipal infrastructure, retrofit homes and stop building homes on floodplains.
Homeowners may also be eligible for discounts for flood-proofing their homes by installing sump pumps or backwater valves, he said. Some insurers have offered discounts of 5 per cent to 15 per cent for a sump pump and backwater valve combo, which also protects your possessions during a flood.
Meanwhile, the report also found that forest fire risk is contributing to major insurance premium hikes in Northern Ontario. In Thunder Bay, the study found insurance premiums jumped by 31 per cent over the same two-year period.
The study also noted that insurance accounted for a much higher portion of yearly costs for a homeowner, with insurance payments accounting for 11 per cent of a benchmark mortgage cost, compared to just 3 per cent in Ajax.
Mr. Starov also noted the high number of hail, flooding and wildfire events in Western Canada in recent years has also had a major impact on insurance rates there, and some communities have seen premiums double as a result.
