Preparing for Uninsurability: What Happens When Climate Risks Make Properties Too Costly to Cover?
For decades, Canadians have relied on home insurance to provide a financial safety net when disaster strikes. But what happens when the disasters become so frequent and severe that insurers retreat? Across Ontario and the rest of Canada, climate‑driven floods, wildfires and hailstorms are pushing the concept of uninsurability from theoretical to imminent reality. In July 2024, flash flooding in Toronto and the Greater Toronto Area caused nearly $1 billion in insured losses. This event contributed to a record $9 billion in insured damage for 2024 the most destructive year in Canadian history. Premiums are soaring, coverage is shrinking and some high‑risk zones are already being excluded from policies.
This article explores why climate change is making certain properties too costly to insure, how insurers and regulators are responding, and what homeowners can do to prepare for a future where “no coverage available” becomes more common.
The Rising Cost of Home Insurance
Ontario homeowners have watched premiums climb at an alarming rate. Between 2014 and 2024, home insurance rates increased 84 %, with a 12.7 % jump in 2024 alone. That escalation is accelerating: in the first half of 2025, premiums rose another 5.7 %. A study by the insurtech firm MyChoice found that home insurance rates across Canada increased 5.28 % in 2025, with Ontario up 5.45 %. Average annual premiums in the province climbed from $657 in 2015 to $1,176 in 2025 a 79 % increase over a decade. In Mississauga, homeowners now pay about $1,470 per year; in Brampton it’s $1,352. Northern and rural communities face premiums that are 30–80 % higher than their southern counterparts.
The price hikes are accompanied by shrinking coverage. In flood‑prone zones like Windsor, Richmond Hill and Ottawa, insurers are increasingly excluding flood damage from standard policies. The result is a growing number of households forced to go without coverage or seek alternative protection.
Floods, Fires and Uninsurability
Why are insurers pulling back? The answer lies in the scale and frequency of climate‑related disasters. By the third quarter of 2024, Canadian insurers faced $7.6 billion in natural catastrophe losses, and the summer of 2024 alone generated more than $7 billion in insured damage from floods, wildfires and hailstorms. Catastrophe models now show that concentrated flood events and urban heat islands pose risks far beyond historical norms. In Ontario’s July 2024 flash floods, for every dollar insured, there were $3–4 in uninsured losses.
The picture isn’t limited to floods. Wildfires like the 2024 Jasper blaze (with $1.1 billion in insured damage) and hailstorms in Western Canada are straining insurers’ capital. As a result, insurers are managing their capacity more cautiously. Willis Towers Watson notes that for catastrophe‑exposed properties, rate increases of 10–20 % are expected, and insurers will deploy capacity more judiciously. They are also demanding updated engineering and loss‑control measures before providing coverage.
The Transparency Gap
Consumers and even governments are often in the dark about how insurers price climate risk. A complaint filed in July 2025 by the advocacy group Investors for Paris Compliance (I4PC) argues that home insurance premiums are a “black box”. Unlike auto insurance, where FSRA publishes rate changes and justifications, there is no public analysis of how home premiums are set. The group noted that many flood and fire maps used by insurers are proprietary, leaving homeowners unaware of their true risk. They also pointed out that several major Canadian insurers invest billions in fossil fuel projects, a practice that exacerbates climate risk and then feeds premium hikes.
The lack of transparency has real consequences. An estimated 10,000 Canadians turned to crowdfunding between 2019 and 2023 to cope with uninsured climate‑related damages. Without access to risk data or affordable coverage, homeowners are left vulnerable to catastrophic losses.
When Insurers Say No
Canada’s Flood Task Force estimates that 90 % of the country’s annual flood damage occurs in the 10 % of homes most at risk. Many of these 1.5 million properties cannot obtain private flood insurance because the potential payouts exceed what insurers collect in premiums. In such cases, homeowners either cover the losses out of pocket or rely on government disaster assistance programs if the flooding is severe enough.
Ontario has already seen insurers withdraw coverage in certain high‑risk areas. Some policies in Windsor and parts of the GTA exclude flood damage altogether. In the U.S., major insurers have stopped writing new homeowners policies in wildfire‑prone California, highlighting how quickly markets can collapse when risks become unmanageable. Canada isn’t far behind: some insurers have reduced or limited coverage in high‑risk zones, prompting calls for government‑backed risk pools or reinsurance schemes
How to Prepare for a Hard‑to‑Insure Future
While the macro forces driving uninsurability are daunting, homeowners and businesses aren’t powerless. Here are practical steps to mitigate risk and maintain coverage:
Know Your Risk
Use flood and hazard maps from your local conservation authority or the Toronto and Region Conservation Authority’s viewer to determine if your property sits in a floodplain.
Consider consulting a risk professional to assess wildfire, hail or wind exposure.
Invest in Resilience
Install a sump pump and backwater valve to mitigate sewer backup and overland water damage.
Elevate electrical panels and furnaces above potential flood levels.
Fire‑proof properties in wildfire zones by clearing flammable debris and choosing fire‑resistant materials.
Retrofit roofs and windows to withstand extreme winds or hail.
Review and Augment Coverage
Verify whether your policy includes overland flood and sewer backup coverage. These are often optional riders.
If private insurance is unavailable, investigate government programs or parametric insurance products that pay out based on trigger events.
Support Transparency and Adaptation
Engage with community groups advocating for open access to flood and fire risk data.
Encourage provincial and federal governments to invest in resilient infrastructure, such as flood barriers and wildfire detection satellites.
Follow the ongoing FSRA consultations and support policies that require insurers to publish rate justifications.
Consider Long‑Term Adaptations
Evaluate whether relocating to a less risky area is financially and emotionally feasible. In some cases, relocation may cost less than repeated losses and skyrocketing premiums.
Climate change is transforming insurance from a routine household expense into a complex risk management challenge. With premiums rising, coverage shrinking and entire neighbourhoods edging toward uninsurability, it’s essential for homeowners to understand their risks and take proactive steps. At the same time, regulators and insurers must improve transparency and commit to sustainable underwriting practices.
Preparing for uninsurability isn’t just about paying higher premiums it’s about building resilient homes, demanding accountability from insurers, and advocating for climate‑adaptive infrastructure. By staying informed and investing in mitigation, property owners can better navigate the turbulent waters of Canada’s evolving insurance landscape.