David Fortier

By David Fortier

May 7, 2021


Why does your home insurance cost more?

Did your insurance premium go up with your last home insurance renewal, even if you didn’t make any changes or claims with your insurer? If you answered yes, you’re unfortunately not alone. Several factors have a significant impact on insurance premium rates. Here’s what you need to know.

What kind of changes in your home insurance file could cause a price increase?

Your home insurance premium rate is personalized and recalculated with every renewal. It’s based on factors included in your file, such as:

  • The value of your property and the reconstruction value of your home
    In other words, if you own valuable property (artwork, jewelry, collections, etc.) or if you do major renovations that increase the cost of rebuilding your residence, your insurer will adapt your coverage to your needs.
  • The use of your residence
    For example, your rates could vary if you start to carry out professional activitiesin your home.
  • Claims filed during the last several years
    Experience has shown that in the years following a loss, the likelihood of incurring another loss is greater.
  • The year during which your home and its components were built or renovated
    For example, a roof or water heater near the end of their life cycles could cause a rate increase because they are more likely to be the source of water damage.

If there are no changes in your home insurance file, how can there be a premium rate increase?

Different external factors, over which both the insured and the insurer have little control, cause the latter to raise premium rates so they can continue to adequately cover their clients. Here are the main ones:

  • Increase in the price of materials and labour
    This increase, which has been occurring over the last few years, has a direct impact on home insurance prices. Why? The price of insurance is strongly influenced by the cost of rebuilding the residence to be insured, which is itself based on labour and materials costs.

    Another significant factor is the current pandemic. This exceptional situation has led to rapid increased demand for construction materials, while the periods of lockdown have significantly slowed production of such materials. The impact has been to widen the gap between offer and demand, leading to unprecedented price increases.

  • More frequent and costly water damage
    According to the Insurance Bureau of Canada (IBC), water damage is the main cause of home insurance claims filed in Quebec.

    There has been an increase in both the number and the value of claims due to water damage. This increase is partly due to the growing number of finished basements that were built using high-quality materials and furnished with expensive equipment such as entertainment devices or home movie theatres.

  • Climate change
    All over the world, there has been a spike in extreme weather conditions due to climate change. This has affected home insurance premiums in two ways.

    On the one hand, increasingly frequent extreme weather is causing an increase in the number and cost of home insurance claims.

    On the other hand, it is contributing to an increase in the cost of materials, an important factor for calculating home insurance premiums. These events to power outages, fires, water damage, etc. When they affect the establishments of construction material manufacturers or their suppliers, this can have major consequences on production of materials. Production interruptions, loss of merchandise, scarcity of raw materials: All these situations result in additional production expenses, which sooner or later are reflected in the sales prices of these materials.

    • Flooding
      An increase in the severity, frequency and number of regions impacted by this type of natural disaster could cause a material and labour shortage, which consequently means an increase in the price of repairs of damaged homes.
    • Hail, freezing rain, heavy rainfalls and violent winds
      Increased hail, freezing rain, violent winds and even tornadoes are causing more damage to homes and can, for example, be the cause of:

    • Extreme winter conditions
      Greater variations in temperature, which are becoming more common during our winters, also contribute to rising insurance premium rates. During extreme cold spells, we see an increase in fires caused by the use of heaters, including those linked to ashes that were not disposed of properly.

How can you limit price hikes?

Here are a few tips to help you save and pay the fairest price possible for your home insurance.

5 ways to save on your Home Insurance

Home Insurance Renewal in 10 Questions

Additional resources:

Infoassurance – Why is my premium going up?

Why does your auto insurance cost more?



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