Ontario residents are facing a tough reality in 2025 as both home and auto insurance rates have surged, with many policyholders seeing double-digit increases. This trend, highlighted in recent reports and echoed across the Canadian insurance landscape, is reshaping how Ontarians budget for essential coverage. Here’s what’s driving these increases and what you can do to manage your insurance costs.

Why Are Insurance Rates Rising in Ontario?

There are several key factors behind the sharp rise in home and auto insurance premiums:

Climate-Related Disasters: 2024 was a record-breaking year for weather-related insurance claims in Canada, with $8.5 billion in insured damages nationally. Ontario, alongside other provinces, was hit hard by severe storms, floods, and wildfires, driving up the number and cost of claims.
Inflation and Repair Costs: While general inflation in Canada eased to 1.9% in early 2025, the cost of building materials, auto parts, and skilled labour remains high. These elevated costs are reflected in higher insurance payouts, which insurers are passing on to consumers through increased premiums.
Rising Auto Theft and Claims: Ontario has seen a significant uptick in auto theft, pushing comprehensive auto insurance claims to unprecedented levels. In 2023, the claims ratio for comprehensive auto coverage in Ontario reached 190%, meaning insurers paid out $1.90 in claims for every dollar collected in premiums. This unsustainable trend is forcing insurers to raise rates to maintain financial stability.

How Much Have Rates Increased?

Home Insurance: In 2025, Ontario homeowners are paying an average of 5.45% more for home insurance compared to last year, outpacing general inflation. Over the past decade, the average Ontario homeowner is now spending $519 more annually on home insurance than in 2015.
Auto Insurance: While specific auto insurance rate increases vary by driver profile, many Ontarians have reported double-digit percentage hikes at renewal. The spike is most pronounced for those living in areas with high rates of theft or frequent severe weather events.

What Can You Do to Manage Rising Insurance Costs?

Shop Around: Use insurance comparison tools to get multiple quotes and ensure you’re getting the best rate for your needs.
Bundle Policies: Many insurers offer discounts if you bundle your home and auto insurance.
Increase Your Deductible: Opting for a higher deductible can lower your premium, but be sure you can afford the out-of-pocket cost if you need to make a claim.
Review Your Coverage: Make sure you’re not over-insured or paying for coverage you don’t need. Adjust your policy to fit your current situation.
Invest in Risk Reduction: Installing security systems, sump pumps, or using weather-resistant materials can sometimes earn you discounts and reduce the likelihood of claims.

Looking Ahead

Experts warn that insurance rates in Ontario and across Canada are likely to remain elevated as climate change continues to drive severe weather events and claims. Staying proactive—by reviewing your coverage, shopping around, and investing in home and vehicle protection—can help you manage costs in this challenging insurance market.

For information on how you you can get the right coverage for the right price, contact us.