Ontario Regulator Faces Call to Action on Rising Home Insurance Rates

Strategic Insights -

As climate change fuels extreme weather events, home insurance rates in Ontario have surged 84% between 2014 and 2024, outpacing the 28% inflation rate over the same period. This alarming trend, which has left some homeowners facing unaffordable rates or even losing their insurance coverage, has prompted a complaint to the Financial Services Regulatory Authority of Ontario (FSRA) from advocacy group Investors for Paris Compliance (I4PC). The group is calling for the regulator to investigate the issue, increase transparency, and address potential conflicts of interest between insurers and fossil fuel investments.

Key Takeaways:

  • Home insurance rates in Ontario have increased 84% between 2014 and 2024, compared to the 28% inflation rate over the same period.
  • The Financial Services Regulatory Authority of Ontario (FSRA) has been criticized for not doing enough to address the issue, despite its mandate to uphold fair treatment of insurance customers.
  • The lack of transparency is a major concern, with I4PC calling for public disclosure of rate changes, similar to auto insurance.
  • Regulators across Canada should be looking into the trend, but Ontario's concentrated flood risks and high housing market make it a strategic starting point for investigation.
  • A 2022 report from the Task Force on Flood Insurance and Relocation highlighted the need for flood risk maps to be made public, with 94% of Canadians living in high-risk areas unaware of their risk.
  • I4PC alleges a conflict of interest between insurers' investments in fossil fuel companies and their commitments on climate change.

Statistics:

  • 84% increase in Ontario home insurance rates between 2014 and 2024.
  • 28% inflation rate over the same period.
  • $3 billion total flood risk per year in Canada (Task Force on Flood Insurance and Relocation, 2022 report).
  • 94% of Canadians living in high-risk areas unaware they are at risk (Task Force on Flood Insurance and Relocation, 2022 report).
  • 10,000 to 15,000: the cost to add flood protection, if available.
  • One per cent of properties making up a third of the potential costs in flood risk (Task Force on Flood Insurance and Relocation, 2022 report).

Sources:

  • "Ontario advocacy group calls on regulator to investigate rising home insurance rates" by Ian Bickis The Canadian Press.
  • Task Force on Flood Insurance and Relocation (2022) report.