Why Did My Home Insurance Go Up? Straight Answers for Canadians
TL;DR Why did my home insurance go up?
If your home insurance premium went up recently, it could be because:
- You filed a claim
- You made changes to your property or your policy
- Your credit rating decreased
- Your insurance provider adjusted their pricing algorithm
- Climate change and inflation are driving up prices nationwide
You can always contact your insurance provider for an explanation of your premium increase.
The most common reasons home insurance premiums increase
Not all premium increases are the same. Let’s break down some of the most common reasons the cost of home insurance can go up.
You filed a claim this year
If you filed a claim on your home insurance policy this year, your premium increase likely reflects the added risk to your insurer. You may also have lost a claims-free discount, even if you didn’t know you had the discount in the first place.
Insurance companies raise your prices after a claim because filing one claim is a good predictor of future claims. You may know that your claim is a one-off anomaly, but your insurance company can’t be sure. They base their pricing on data, and claims data suggests that a homeowner who’s filed one claim is more likely to generate future claims than one who is claims-free.
Don’t despair: Your home insurance exists so that you can make a claim, so you didn’t do anything wrong. You may also have the chance to lower your rate again by staying claims-free for a certain period—usually a minimum of one year.
If your home insurance went up due to a claim, this is the perfect time to shop around and look for competitive offers from other insurers. While your recent claim will raise your home insurance quotes from all carriers, you might be eligible for a better rate from another provider.
You made changes to your home or property this year
The cost of your home insurance reflects the cost to repair or replace your house and the property inside it. If you made significant changes to your property in the past year, either through renovations or new purchases of high-value items, your homeowners insurance could go up as a result.
Always inform your home insurance company when you undertake any significant renovations or acquire property that needs special coverage, such as jewellery, sporting equipment, or wine.
While renovations that increase the value of your home can drive up your insurance costs, some home improvements can actually lower your premiums. You may earn a home insurance discount on your policy if you installed a centrally monitored security system or fire alarm.
Other discount-worthy upgrades may include a backwater valve, an alarm system for your sump pump, or climate-resistent fortifications.
Your credit score went down this year
Your credit history may not seem directly related to your home insurance coverage, but changes in credit can directly impact the cost of coverage.
In Ontario, the home insurance industry permits carriers to conduct soft credit checks on prospective customers and award discounts to those with good credit. These discounts can be significant: as much as 25–35% off your total premium from some major carriers.
If your credit score decreased significantly in the last year, you might find yourself paying a lot more for the exact same coverage options, even if you didn’t file a single claim.
Of course, building your credit is the best way to reclaim your good credit discount. But building credit could take time. While you work on your overall financial health, you might consider temporarily raising your policy deductible to reduce your ongoing premiums.
Home insurance claims in your area increased this year
One of the primary factors driving home insurance increases in Canada since 2019 is a sharp increase in severe weather events.
Wildfires in the west, floods and ice in Ontario and Quebec, and hailstorms on the prairies are all hitting Canada with unprecedented frequency and force. In 2025 alone, insurance losses from extreme weather events cost insurance companies over $2.4 billion, according to the Insurance Bureau of Canada (IBC). The prior year, weather-related insured losses soared to a record-breaking $9.4 billion.
Insurance companies track these costs against geography, identifying areas with a high number of claims as potential high-risk zones going forward. If dozens of customers in your area filed water damage or windstorm claims this year, you’re likely to see an increase in your costs—even if your home was untouched or you chose to deal with weather-related damage out of pocket.
As climate plays an increasing role in the cost of home insurance in Canada, insurance companies are offering financial rewards to homeowners who proactively fortify their homes against weather-related damage. Ask your insurance agent or broker about home upgrades that could earn you a discount, such as installing storm shutters or upgrading to a wind-resistant roof.
Your insurer adjusted their pricing models recently
Rate changes in the wake of severe weather and natural disasters aren’t automatic; they’re a reflection of insurance companies’ strategic efforts to maximize profit in an increasingly difficult market.
Insurance pricing is regulated by the government, but carriers are still free to adjust their pricing models to attract certain customer profiles. If your insurance rate has gone up and nothing’s changed about your home, your policy, your claims history, or even the weather in your area, it’s possible that your insurance company has simply decided to target a different type of business.
Insurance companies adjust their pricing models often, which means that for every rate increase you receive, there could be a lower rate waiting from another insurer. Shopping regularly (like once a year when you receive your renewal notice) can help you stay on top of changes in insurers’ pricing algorithms.
If none of that happened…
If none of the factors listed above are in play, your insurance may still have gone up due to inflation.
Inflation has a direct impact on home insurance premiums because it drives up construction costs. Both the price of labour and the cost of building materials have risen across Canada in recent years, with residential building costs up 3.0% nationwide in 2025 alone. Desjardins, a leading provider of home insurance in Ontario and Quebec, says construction costs have increased by 65% since 2019.
Factors impacting construction costs include:
- Labour shortages: Industry analysts estimate that Canada’s residential construction market may fall short by $300,000 workers as soon as 20233. As the market tightens, labour costs go up.
- Tariffs: U.S. tariffs are driving up the price of key construction materials and equipment.
The more your home costs to repair or rebuild, the more your insurance company has to pay out in the event of a claim. Your premiums may increase by a small amount annually to reflect the impact of inflation on anticipated claim costs.
Your cost increase may also be due to a policy feature known as an inflation guard. If you have an inflation guard endorsement, your coverage limit will increase each year to match the rate of inflation and ensure that the full replacement cost of your home is still covered. If you’re not sure whether your policy includes this feature, ask your agent or broker.
It’s a good habit to review your home insurance policy once a year to make sure that you understand all the coverage you’re paying for, and that your policy selections still meet your needs. This is also a great chance to ask your insurance broker or advisor about discounts you may be eligible for.
Is it normal for home insurance to increase every year?
The bad news for homeowners is also good news: annual rate increases are a normal part of life. As consumer prices shift and risk develops each year, insurance companies adjust their prices to keep their margins profitable and ensure their ability to fulfil claims in the future.
The silver lining is that because rate increases are inevitable, you can prepare for them.
What you can do if your home insurance went up
If your home insurance premium went up, no matter the cause, your best option is to compare prices from other insurers.
Don’t just get one alternative quote. Aim for at least three new quotes for the same amount and type of coverage. Because getting home insurance quotes can be a labor-intensive process, you can simplify the comparison by working with an insurance broker.
An insurance broker doesn’t work for an insurance company; instead, they’re independent agents who work for you, the consumer, to help you find the best coverage at the best possible price.
PolicyMe's digital platform can help you compare your options on the market. And instead of a sales pitch, we offer unbiased, personalized advice from licensed experts to ensure you're getting the right coverage at the best price.
Other strategies that can help you recover from an unexpected rate hike include:
- Raising your deductible: If the rate increase was fairly small and you have a decent cushion in savings, adjusting your deductible is one of the simplest ways to bring your premium back in line with your current budget.
- A thorough coverage review: Don’t jump to blindly cutting coverage you may need, but take the time to look over your coverage selections and make sure you understand everything you’re paying for.
- Discount research: Home insurance companies are notorious for keeping their discounts under wraps, and you may qualify for discounts you’re not aware of. Ask your agent or broker to help you search for potential discounts to lower your rate.
- Home and auto bundling: If you own a car and haven’t yet bundled your home and auto insurance, this may be your opportunity. Explore bundled quotes to see if you can reduce your premiums for both types of coverage.
FAQ: Why did my home insurance go up?
This article is for general information only and is not insurance or legal advice. Examples and any sample quotes or rate ranges are illustrative and do not constitute an offer or guarantee of coverage, price, or eligibility. Actual coverage, discounts, and premiums depend on your individual circumstances and the insurer provider; if there is any discrepancy, your policy and insurer documentation govern. For advice about your situation, speak with one of our licensed insurance professionals.