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The hidden cost that's changing the math on homeownership

When people talk about housing affordability in Canada, the conversation usually starts and ends with mortgage rates and home prices.

But there's a third number that's been climbing fast enough to deserve its own conversation.

Home insurance.

According to Rates.ca, the average Canadian home insurance premium rose 6.2% year over year in 2026, reaching an average of $2,235. In some provinces it's been much steeper. Atlantic Canada has seen increases of 8% to 12%, and some high-risk postal codes are dealing with jumps of 15% or more at renewal.

The biggest driver might surprise you. It's not fire. Water damage is now the number one cause of home insurance claims in Canada, surpassing fire and theft combined. Sewer backups, burst pipes, overland flooding. Aging municipal infrastructure plus more intense rainfall events have roughly doubled sewer backup claim frequency over the last decade in many Canadian cities.

And the cost to settle those claims keeps going up. Residential construction costs have risen over 60% since 2019, which means every claim is more expensive for insurers to pay out. Canada's property and casualty industry actually lost money on home insurance in both 2023 and 2024. That financial pressure is a big part of why renewal notices look the way they do right now.

A few things worth knowing:

👉 If you're buying, factor insurance into your total monthly cost from the start. A home in a flood-prone area or an older build with outdated plumbing and electrical can carry a much higher premium than a newer home across town. Ask before you make an offer, not after.

👉 If you're selling, buyers are increasingly doing this math. A high insurance cost tied to the property can quietly affect what someone is willing to pay. It's worth knowing what your home's insurance profile looks like.

👉 If you're staying put, don't auto-renew without shopping around. Bundling home and auto, increasing your deductible, installing a monitored alarm system, and upgrading your sump pump or water shutoff valve can all meaningfully lower your premium.

This isn't a reason to panic. But it is a piece of the homeownership equation that didn't use to matter as much as it does now. And it's not going away.

If you want to talk through how this fits into your plans, reply to this email. We're happy to help you think it through.

P.S. If it's been more than a year since you've reviewed your home insurance policy, it might be worth a second look.

Talk soon,
CHRIS, PATRIC, JULIE, JASMINE, KRISTI & BRELL

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WHAT ELSE WE ARE TALKING ABOUT

What will it cost to own this home?

The mortgage payment gives you a starting point. As you look more closely at a home, the other expenses help you decide whether it’s a comfortable fit.

Insurance is one to explore early. A quote for the property gives you a number to include in your budget, along with an opportunity to ask what’s covered and what you’d pay yourself if you made a claim.

You won’t necessarily have all the property information the insurer needs after a showing. That’s where we can help. Send us the questions, and we’ll work with you to request the missing details.

Our blog explains how to get started and what to discuss before choosing a policy.

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