A Statistics Canada report highlighting extreme weather’s impact on insurance claim costs has underscored the need for resilience action, an industry peak body says.

“Reducing cost pressures in the home insurance market means confronting the root cause: rising risk,” Insurance Bureau of Canada VP of federal affairs Liam McGuinty said.

“That requires a decisive shift to adaptation – investing in resilience, building in safer ways and locations, and taking action now to curb the growing damage from extreme weather.”

Catastrophe claims caused by extreme weather exacerbated by climate change “increased substantially” in 2024 to $C8.6 billion ($8.7 billion), out of $C9.1 billion ($9.2 billion) in total claims, Statistics Canada says.

Last year’s weather was more moderate, but insurers continued to increase rates to meet rising cost pressures, with catastrophes hitting property more than the motor segment. Total claims and expenses were “marginally higher” last year than in the previous 12 months.

From December 2019 to December last year, home and mortgage insurance premiums increased 45% and passenger vehicle premiums rose 23.9% – outpacing a 21% gain in the overall consumer price index.

The report says extreme weather is increasing in frequency and severity, with eight of the top 10 most costly weather events occurring since 2013.

“Due to shifting risks and elevated home and construction prices, underinsurance also poses a significant risk for homeowners,” it adds.

The Insurance Bureau of Canada has called on governments to provide incentives for homeowners to invest in measures to reduce extreme weather damage and recovery costs, to strengthen planning and development rules, and to invest in resilient infrastructure.