Northern Ontarians pay up to 80% more for home insurance than the rest of the province

Many communities in northern Ontario, particularly rural communities, pay 30% to 80% more for their home insurance than cities around southern Ontario, according to the latest Rates.ca Home Insuramap data.

As of 2025, the average annual home insurance premium for a 45-year-old homeowner living in a 2,500 square foot home* in Toronto is $1,523. However, if they were to magically transport their home 2,000 kilometres northwest to Red Lake, a town near Manitoba, they could see their annual premium balloon to around $2,873.

Depending on where this homeowner settles, the average cost of home insurance across Ontario is $1,565 — which indicates that residents in Red Lake and surrounding areas could pay up to 80% more for home insurance than their average Ontario counterparts.

Our Home Insuramap data comprises weighted averages based on real home insurance quotes pulled from nine different insurance providers, for 184 cities and towns across the province. Across the map, we found that cities located in northern Ontario pay substantially higher home insurance premiums than in Toronto and surrounding municipalities in southern Ontario.

This is true even in the face of the worsening floods that have ripped through the region in recent years — including, and especially, the floods in 2024, which cost $940 million in insured damages.

This report will delve into the reasons behind the pricing as well as provide a full breakdown of the least and most expensive cities for home insurance in Ontario.

Why home insurance is so much more expensive in northern Ontario

Though property insurance rates in Toronto and southern Ontario are steadily increasing, home insurance premiums in those areas are still nowhere near as high as in northern Ontario.

This is mainly due to the harsher climate in those areas — the impact of which is made worse by poor or aging infrastructure and lack of access to essential amenities and services.

“Depending on their location, homes in northern Ontario could have a greater risk of wildfire, flooding and other extreme weather events,” explains Steve Cohen, Rates.ca’s VP of Insurance and Chief Underwriting Officer, adding that insurance companies often factor in proximity to fire services when pricing home insurance policies.

“Homes in rural and more remote areas tend to have an increased risk of major damage if there is a fire due to the lack of a nearby fire hydrant or fire station,” he says.

According to Cohen, homes in more remote areas can be more expensive to repair and rebuild, too. Fewer contractors in the area lead to higher costs for labour and transportation of materials, which can result in more expensive claims. Finally, there are windstorms, which, according to the latest studies, have become much more frequent in Ontario.

“Northern Ontario sees strong windstorms that cause roof, fence and siding damage,” says Stephanie-Lynn Gagne, an insurance broker with Oakville-based 705 Insurance. “These weather-related claims are common during seasonal changes and contribute to overall regional loss ratios.”

The latest data from Environment and Climate Change Canada indicates that climate change is likely to worsen in the near future. This would lead to hotter temperatures and more severe wildfires, along with more intense rainfalls, increasing the risk of urban and coastal floods.

According to Rates.ca insurance expert Daniel Ivans, if climate-related incidents continue to intensify, “premiums in high-risk areas are likely to rise at a faster rate than in urban centers like the GTA and other major cities.”

Severe weather is driving up home insurance costs

Across the province, home insurance premiums are rapidly increasing.

According to Applied Rating Index, personal property lines in Ontario saw a 5.7% increase in premium rate change year over year in Q1 2025. This is slightly below the changes observed throughout 2024, which ranged from 13% to 9% between Q1 and Q4.

If the increased prevalence of severe weather events has been any indication, those rates are poised to go up. Severe weather has been costing the country more and more in insured damage each year.

While it’s easy to dismiss these as regular weather occurrences, the reality is that severe weather has been costing the country more and more in insured damage each year.

According to the IBC, 2024 was the most expensive year on record, costing $8.55 billion in insured damage nationwide. The previous record was in 2016, at $6.2 billion.

Damage exceeding $2 billion — a rarity in previous decades — is now an almost yearly occurrence.

“Weather across Canada has become more extreme and unpredictable,” says Daniel Mirkovic, President and CEO of Square One. “This results in more frequent and severe damage to homes. And I would say it's pretty widespread across the entire province.”

Though wildfires are not as great a risk in southern Ontario, they are in areas in the northwest like Red Lake and Sioux Lookout, which both sit amid dense forests. According to Ontario’s fire map, this is where most of the wildfires in the province are located (as of June 2025), with several communities finding themselves under evacuation orders.

In 2023, for instance, wildfires burned over 18.5 million hectares of land in Canada, displacing 185,000 people, according to the Internal Displacement Monitoring Centre (IDMC) in Geneva.

And if it’s not fire that causes the brunt of the damage in Ontario, it’s flooding.

Gagne works with homeowners in the city of Timmins, which sees premiums that are 40% higher than the provincial average.

She cites sewer backup as “one of the most frequent and costly claims.”

“While Timmins’ sewer backups aren’t directly caused by a faulty city system, they are exacerbated by the combination of a sewer setup that gets overwhelmed during spring melt or heavy rain, aging infrastructure and overcapacity, and blockages caused by tree roots or improper waste disposal,” she says.

“Flooding from spring melt or rainfall runoff — especially near the Mattagami River — is also a frequent concern,” she adds. “These events often aren’t covered by default, so overland water endorsements are becoming increasingly essential.”

Water coverage can make up for up to 10% of your home insurance cost

Across Ontario, flood risk plays an outsized role in the cost of home insurance.

“Flooding plays a significant role in influencing premiums, especially in areas with higher water-related risks,” says Ivans. “Some data we're working on shows that in regions prone to flooding, water coverage costs make up 10% of the premiums.”

For example, he says, for a home insurance premium of $2,500, around $250 could go toward water coverage due to water-related risks like sewer backup and flooding. But in the event of a really bad flood, the homeowner may still have more to pay — for homes in riskier areas, like near lakes and rivers, some insurers limit the payout for water-related damages to $30,000.

“The trend we’re seeing shows the cost of water coverage rising while some providers continue capping coverage based on exposure,” he says.

So, even though your policy may have all available water protections, your coverage could still be capped at a certain amount.

“Premium variance comes down to the geographic location and insurer risk evaluation,” says Ivans. “For example, in Ontario, some insurers offer more comprehensive water coverage while others apply caps in certain high-risk areas.”

Mirkovic says that even if many of the headline weather disasters are concentrated in specific regions, all homeowners across the province end up footing the bill eventually.

“The whole principle of insurance is that losses of the few are paid by the many,” he says. “So, ultimately, insurance providers must increase premiums to ensure they're collecting enough money to pay for claims resulting from these natural catastrophes.”

How to protect your home at the right price for you

With the increasing number of claims related to severe weather and water damage, homeowners need more protections in place than ever.

Homeowners are advised to purchase a comprehensive policy, instead of a broad form or named perils policy.

“Comprehensive water coverage should ideally include sewer backup, overland water, groundwater and surface water coverage,” says Ivans. “Some insurers differentiate these coverages, so having a breakdown is important. Without this, homeowners in high-risk areas could face significant financial losses if an event falls outside their limited coverage.”

That said, it’s important to read the fine print or, better yet, have an insurance professional walk through the policy to you.

“Not all comprehensive policies are the same,” says Mirkovic. “Some comprehensive policies will exclude water damage altogether, and then you can add it back through an endorsement.”

Those who worry that their premiums are too high due to all the added protections — or their policy documents too opaque — may soon be able to have more say over their coverage, depending on their insurance provider.

Many companies are trending towards customizable solutions, says Ivans, allowing customers to adjust small details in their coverage, like how much value they want to place on a shed.

“This shift empowers consumers to take greater control over their premiums while aligning benefits with specific needs,” he says.

Ultimately, the level of coverage that homeowners actually need comes down to one simple question: What can you afford to pay out of pocket when disaster strikes?

“If you can’t afford $30 more a month for overland water coverage, you can’t afford to skip it,” says Ivans. “The cost of rebuilding or repairing after water damage can spiral into tens or even hundreds of thousands.”

Lastly, homeowners should regularly compare home insurance quotes online — it’s the easiest way to see what coverage is available in their area at the best price.