Key Takeaways
- Insured losses from severe weather in Canada reached a record $8.5 billion in 2024.
- As catastrophic (CAT) losses continue to rise, a hardening Homeowners Insurance market is becoming increasingly likely in high-risk areas with stricter underwriting, higher deductibles and rates, and more exclusions.
- More homeowners are seeking specialty insurance, especially for high-risk properties, those with prior claims, and nontraditional uses like in-home businesses.
- Partnering with an experienced managing general agent (MGA) like Burns & Wilcox can provide the flexible, comprehensive, and tailored solutions homeowners need in this evolving market.
State of the Market
The Residential Property Insurance market is shifting, driven by a surge in natural disasters and escalating property values. In 2024 alone, insured losses from severe weather events reached a record $8.5 billion, surpassing the previous high of $6 billion set in 2016.
Last summer, events such as the Jasper wildfires, Calgary hailstorm, and widespread flooding in major cities, lead to approximately 228,000 insurance claims—a 406% increase compared to the 20-year average. This rise in claims has caused insurers to tighten underwriting standards, leading to higher deductibles, stricter policy exclusions, and increased surcharges—particularly for properties in CAT-prone regions.
At the same time, inflation and rising home values are making insurance more expensive. Re/Max Canada’s 2025 housing outlook projected a 6% annual increase in average home prices this year, or 7% in the single-family detached market, pushing the average price above $900,000, making homeownership unaffordable for many families. This has also driven demand in the rental market, increasing the value of rental properties while adding complexity to insurance placements. Additionally, the rising cost of building materials continues to drive up replacement values, with replacement cost inflation now at or above 5%.
As a result, more homeowners are turning to specialty insurance to secure adequate coverage. Homes with prior claims, unique structures, high-value assets, or nontraditional uses—such as short-term rentals, multi-use properties, and home-based businesses—often do not fit within the guidelines of standard insurance carriers. Reentering the standard market is extremely difficult once a policy is denied or non-renewed. The specialty market provides customized, flexible solutions for hard-to-place and high-risk properties.
In recent years, while some areas have seen rate stabilization or softening, regions prone to severe weather are experiencing gradual rate increases, particularly following the significant hailstorms and flooding in 2024.
Exclusions & Endorsements
Certain properties, particularly those located in areas prone to natural disasters, are now subject to increased restrictions, surcharges, and higher deductibles. For instance, some insurers in British Columbia require earthquake deductibles ranging from 15% to 20%. Additional types of higher-risk properties include:
- Home with unprotected or semi-protected risks (e.g., limited access to fire services)
- Seasonal or secondary homes
- Properties with multiple lenders
- Homes that include in-home businesses
- Vacant homes, rental properties, and mixed-use residences
When considering coverage options for your clients, it is also important to be aware of certain limitations. Common policy exclusions include:
- Water damage (sewer backup, flood, and overland water, requiring separate endorsements)
- Wind, hail, wildfire, and earthquake damage
- Theft (especially for rental properties)
- In-home business operations
To help brokers navigate these growing coverage gaps, Burns & Wilcox provides access to a wide range of policy endorsements, including:
- Earthquake
- Flood
- Sewer Backup
- Wildfire
- Wind & Hail
Additionally, Burns & Wilcox is launching a new, exclusive program this year offering enhanced solutions including wildfire defense services for the western provinces.
In the months ahead, we anticipate further underwriting refinements, with additional exclusions and increased deductibles for high-risk areas. As the market evolves, brokers who proactively address coverage limitations and secure specialty solutions will have a competitive edge.
Growing Importance of Risk Mitigation
As CAT weather events become more frequent, underwriters are placing greater emphasis on proactive risk mitigation. To remain insurable in today’s evolving market, homeowners should take proactive steps to reduce risks.
- Wildfire-Prone Areas: Investing in fireproof home materials and maintaining defensible space through brush clearance can significantly reduce exposure.
- Earthquake-Prone Regions: Seismic retrofitting can help protect homes from earthquake damage, while flood barriers and drainage systems can mitigate water-related risks.
- Aging Roofs & Infrastructure: Homeowners should replace their roofs approximately every 20 years to maintain structural integrity.
- Water Damage Prevention: Installing automatic water shutoff devices can help prevent internal flooding from plumbing failures.
These measures are especially critical for older properties, where infrastructure strain and outdated materials can pose additional risks. Homes with wood stoves may require an approved WETT certificate, and properties with oil tanks must meet environmental inspection standards. Additionally, high-value residences should have security systems and alarms, with documentation available for carrier review.
While some insureds may view their Homeowners Insurance as a maintenance policy, it is crucial to understand that insurance is designed for sudden, accidental, and unforeseen incidents—not routine upkeep. By proactively addressing risk factors, homeowners can enhance their insurability, reduce premium costs, and secure more comprehensive coverage—a crucial advantage in an insurance market that is becoming more selective.
Tips for Brokers
- Highlight the advantages of specialty coverage. Many properties no longer fit into the standard market due to previous claims, unique structures, short-term rentals, or high-risk locations. Specialty solutions offer greater flexibility and are customized to address specific risks.
- Promote risk mitigation. Underwriters favor properties with fire prevention, floodproofing, and structural reinforcements. Recommend measures like wildfire brush clearance, seismic retrofitting, water shutoff devices, and upgraded roofing to help clients reduce their risk profile and secure better rates.
- Review policy exclusions carefully. Typical Homeowners policies often exclude items such as sewer backup, earthquake damage, and wildfire damage. Explore endorsements that close coverage gaps.
- Strengthen underwriter relationships for better placements. Providing thorough submissions that include complete risk disclosures, mitigation efforts, and target premiums can enhance placement success. Brokers who maintain open communication and provide feedback can build stronger partnerships with underwriters, which may result in access to more favorable terms and exclusive market options.
- Prepare clients for market shifts. Rate increases and higher deductibles are becoming more common in areas prone to catastrophic events. Stay informed about these shifts and communicate potential cost increases to clients, allowing them to prepare accordingly.
- Partner with an experienced MGA. Navigating the evolving Residential Property insurance market requires specialized knowledge. A partner like Burns & Wilcox can help access a range of markets, develop comprehensive insurance solutions, and provide risk management strategies for challenging placements.
In today’s evolving market, brokers who educate clients, emphasize risk mitigation, and build strong underwriting relationships will have a competitive advantage. Burns & Wilcox provides the expertise and market access to help brokers secure the best placements for their clients. Reach out today to explore tailored solutions for hard-to-place Residential Property risks.
