A new report by Rates.ca shows insurance premiums could increase after a flooding claim, but experts say it could be more cost-saving than if you have no coverage at all.
The report, released Monday, shows a single water damage claim in Ontario can raise home insurance premiums by an average of $376 annually, or 19 per cent.
“We’re seeing flooding all throughout Toronto and the GTA, everywhere in Canada is being hit with climate change in different ways and what that means is obviously more claims, more expensive claims associated with it,” said Daniel Ivans, Rates.ca’s insurance expert and a licensed broker.
“We see obviously inflation and other things driving the cost of claims because the cost of labour is increasing, the cost of parts and parts shortages and all of these things are kind of snowballing into obviously what has become a big obstacle for Canadians.”
The data comes from Rates.ca’s Home Insuramap, which uses weighted averages from insurance quotes across the province, primarily how much water claims add to premiums.
Rates.ca says flooding has become the most damaging natural hazard in Canada, with the Insurance Bureau of Canada (IBC) reporting that the total insured losses from flooding events have averaged close to $800 million annually in the last 10 years.
The report says overland flooding is the most common natural disaster, yet only 55 per cent have coverage for this type of event. Overland flooding is defined as when water enters homes through doors, windows or cracks in the foundation.

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“The reality is there are a litany of different coverages or exposures that consumers might not be covered for,” Ivans said. “It’s tempting to imagine a water damage claim as maybe just a small flood in the basement or a couple of puddles to clean up, but realistically, this is one of the most common and most expensive claims that we see.”
In Ontario, communities are prone to different types of damage because of the “diverse” environment the province has.

Mississauga, for example, is considered the sixth most expensive city for home insurance in part due to communities near Lake Ontario and “flood-prone waterways.”
Rates.ca says the average home insurance premium in the city was $1,470 in 2025.
Ivans told Global News that where you live can impact premiums, but so do infrastructure and repair costs.
“They pose their own very unique exposures too, particularly from a climate change perspective in rural areas and particularly from an infrastructure perspective in a lot of urban areas, especially in the Greater Toronto Area, including Toronto, Brampton, Mississauga,” he said.
“(They have) older infrastructures that have been taking a beating for the last little while and need revamps, and all of these things in different ways, depending where you are, contribute to what’s driving those premiums.”
A report by the IBC in November 2024 noted that the cost of residential building construction has soared by 66 per cent since 2019, citing Statistics Canada data.
But in addition to building costs of new residences, the country has also seen a 24 per cent increase in home replacement costs.
That, coupled with a shortage of labour, means more costs for insurance, leading to higher premiums.
“Think about a person who had their home totally destroyed by an event: you need to rebuild your home,” said Rob de Pruis, the IBC’s national director of consumer and industry relations. “When there’s delays, your insurance policy covers what’s called additional living expenses.”
This means paying for alternative accommodations, but also for material costs to rebuild.
Both Ivans and de Pruis argue that while rising insurance premiums can be daunting, the cost associated with having none at all can be far greater.
The Rates.ca report notes that repairing a basement can cost at least $43,000 out of pocket.
“A flooding, for example, could be tens of thousands of dollars. If your home was totally destroyed in a fire, that could be hundreds of thousands of dollars or more that you could be out,” de Pruis said. “So this is really a huge financial risk if you don’t have insurance.”
Ivans and de Pruis said that’s why Ontarians, and Canadians, should speak with different insurance brokers to determine the best coverage for them to avoid paying more than they can afford.
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