Where home insurance premiums are trending upwards in 2022

LaSalle, Ont., has the highest home insurance premiums in the province right now, whereas Ajax, Ont., offers the least expensive home insurance premiums, according to the latest data from rate comparison site RatesDotCa.

On average, home insurance premiums in Ontario have increased about 10% since the fall of 2021, compounding homeowners’ cost challenges amid rising interest rates, historic inflation, a labour shortage and increasing incidents of severe weather.

Data released Thursday from RatesDotCa’s Home Insuramap tool found homeowners in smaller, rural communities continue to pay higher premiums, while those in larger urban centres enjoy the lowest in the province.

The average estimated 2022 home insurance premium in LaSalle, located in southwestern Ontario, is $2,411, which is a 15% increase over 2021. Ajax, in the eastern part of the Greater Toronto Area, saw estimated average 2022 premiums more than twice as cheap — $1,068 a year (a 4% year-over-year increase).

Year-over-year cost increases for homeowners in Lasalle and the northwestern Ontario community of Keewatin (18% increase to $2,033 in 2022) highlight vulnerability to the effects of climate change.

RatesDotCa insurance expert Tanisha Kishan believes the threat of water damage in particular explains the most significant premium increases, such as those in Keewatin and LaSalle.

“The topography of LaSalle, in the Windsor region, makes it more likely to flood than other Ontario cities. Similarly, Keewatin, near Kenora, has recently been affected by serious flooding,” Kishan said. “As incidents of severe weather increase across the country, flooding is a peril for which more and more insurance providers are adjusting coverage – all the more so in low-lying areas. It has never been more important for Ontario homeowners to have water damage protection – where possible the greatest amount of protection available.”

Toronto has seen a year-over-year increase of about 17%. Kishan attributes this in part to extreme weather, as well as inflation and supply chain issues driving up prices and wages, plus increased competition for contractors.

Windsor is the second-most expensive city in Ontario, with an estimated 2022 home insurance premium of about $2,139 (a 3% increase from 2021). On the flip side, Stratford is the second-least expensive city in Ontario, with an average 2022 premium of $1,072 (9% higher than last year).

Economic pressures from ongoing global supply chain issues, historic inflation and labour shortages are driving up insurers’ replacement costs at a time when the effects of climate change are also leading to an increase.

“If materials take longer to arrive, the size of a claim can increase exponentially, with the insurance provider paying more for the policyholder’s additional living expenses,” RatesDotCa explained. “If building materials are also more costly and labour costs are greater than at the time the policy was written, the insurer is on the hook for the difference.”

According to RatesDotCa, the Top 10 most expensive areas for home insurance in Ontario are: LaSalle, Windsor, Hearst, Foleyet, South Porcupine, Keewatin, Fort Frances, Val Caron, Elliot Lake, and Kaspuskasing.

The Top 10 least expensive communities are: Ajax, Stratford, Cambridge, Whitby, Holland Landing, Guelph, Waterloo, Kitchener, Concord, and Stouffville.

Feature image by iStock.com/Steven_Kriemadis