Ontario regulator should probe surging home insurance bills tied to extreme weather: complaint

Ontario’s financial services regulator is being urged to launch an investigation into home insurance rates that have nearly doubled in the last decade because of increasingly damaging weather events.

In a new complaint, Investors for Paris Compliance (I4PC), which aims to hold publicly traded companies to accountable to climate goals, noted that insurance premiums in the province have risen 84 per cent on average between 2014 and 2024. There are cases of some homeowners facing year-over-year jumps of up to 72 per cent for their premiums, the organization said.

It’s calling on the Financial Services Regulatory Authority of Ontario (FSRA) to provide public data on home insurance spikes and their justifications – something it already requires of auto insurers. Kiera Taylor, senior policy analyst with I4PC, said auto insurance has been regulated this way since 1988 in Ontario, when there was an outcry about rising rates and affordability.

“What we need is more transparency and for our regulators to have some view of where open-ended premium increases are going,” said Ms. Taylor, who added that better data around how insurers are pricing risk could help keep prices in check.

She noted that insurers use private flood and fire maps that aren’t shared with homeowners, municipalities or developers, preventing them from reducing their risk.

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I4PC is specifically not calling on insurers to put a limit on home insurance premiums, noting that such policies in jurisdictions such as California have had the unintended consequence of leaving many homeowners uninsurable because companies aren’t willing to cover them in risky areas at limited prices.

The Insurance Bureau of Canada, a national industry association that represents property and casualty insurers, said there are already ample data about pricing available in the country.

Liam McGuinty, IBC’s vice-president of strategy, warned that additional regulation could threaten what it called a “healthy” insurance ecosystem in Ontario, where more than 100 insurance companies compete with each other.

“You do nothing to foster more competition or encourage innovation by mandating disclosure or adding red tape,” he said.

Mr. McGuinty said rising insurance premiums aren’t unique to Ontario or Canada. They’re taking place around the world and reflect the increasing risk of insuring communities that are becoming highly disaster prone.

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“Last year was the worst year in Canadian history with $9.2-billion in insured losses, and it wasn’t that long ago where one or two billion would have been a remarkable year,” he said.

He said the root issues are that communities are built in dangerous areas or with materials that are not resilient enough, and called on governments to fund programs to help homeowners renovate their homes to better protect from natural disasters.

The Globe and Mail did not hear back from the FSRA in response to a request for comment.

Ms. Taylor said that while I4PC’s campaign is starting in Ontario, the organization plans to lodge complaints in other provinces as well.

British Columbia, Alberta and Quebec are other jurisdictions that have seen major increases in home insurance prices, especially in areas at risk of fire, hail and flooding.