Every year, extreme weather events wreak havoc across Canada, disrupting the lives of tens of thousands. Financ
ial losses from these events have surged, surpassing $7 billion in 2024, due in part to climate change, asset accumulation and more people living in high-risk areas.
Evidence from Canada, the United States and Europe shows that weather-related disasters aren't experienced equally. The people
hardest hit are often those with the fewest resources to cope.
Lower-income and marginalized populations face greater exposure, have
fewer resources to prepare or recover and incur a higher proportion of losses not covered by insurance.
Even if they are famous, many people have difficulty covering the
deductible because they lack emergency savings. This means damage is not repaired, people live in unsafe or unhealthy conditions and the financial and personal risk of future events is increased.
Insurance helps households recover and can prevent them from falling
g — or falling deeper — into poverty after a disaster. But across Canada, insurance is becoming costlier and, in some places, difficult
er to get. Between 2019 and 2023, average home insurance premiums rose by 21% overall. For lower-income Canadians, that increase was 40%.
Widening Protection Gap
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Canada’s growing insurance protection gap is a serious concern, and it’s widen
ing at a time when weather-related disasters are becoming more frequent and more severe.
When household is uninsured, losses can strain household budg
ets and leaves people unable to meet their basic needs. As extreme weather escalates, so does the likelihood that more families will find themselves unable to recover.
Affordability is the primary driver of the protection gap, but it is not the only one. Many Canadians do not understand the be
nefits of insurance, or underestimate the probability and cost of suffering a loss.
Accessibility to insurance is also a challenge, especially in remote areas where it is usually purchased in person. While the growth of digital purchasing channels helps, it is not a solution
for those without reliable internet or sufficient digital skills.
Finally, the market itself does not always meet the needs of low-income or marginalized groups. There is a lack of print
security products designed for these groups, leaving many without the protection they need.
Strengthening Community Resilience
Better insurance options, stronger investments in mitigation and better support for consumers can help reduce inequities and strengthen resilience.
Community-level mitigation is a good starting point. Land-use planning that steers development away from high-risk areas can
prevent future losses. Programs like FireSmart, which reduces wildfire losses, and infrastructure designed for a changing climate also helps limit damage as severe weather becomes more frequent.