A new report from the Insurance Bureau of Canada (IBC) warns that while Canada’s home insurance system remains more stable than California’s, it is at risk due to government inaction on climate resilience. The report, ‘Lessons for Canadian Policymakers from the California Insurance Crisis’, urges Canadian leaders to avoid the mistakes that led to California’s current crisis, where 1 in 10 homes are uninsured and 3.6 million policies were not renewed between 2020 and 2023. Key issues in California include pricing restrictions that prevented insurers from accurately reflecting wildfire risk.
Although wildfire insurance is still widely available in Canada and included in standard policies, rising catastrophic weather events—especially wildfires—are straining the market. Annual insured wildfire losses in Canada have skyrocketed from $84 million in the early 2000s to $706 million over the past decade, with Alberta alone suffering over $1 billion in losses in 2024.
IBC calls for urgent action from all levels of government, including stronger infrastructure, updated building codes, better land use planning, and broader implementation of wildfire mitigation strategies like FireSmart. The message is clear: proactive risk management is essential to prevent Canada from facing a similar insurance crisis.
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