Insurance premiums in Canada have risen in recent years as repair, rebuilding, theft and claims costs have gone up. This guide sets out why a renewal comes in higher, factor by factor for auto and home insurance, why claims follow you to a new insurer, and what can bring the price back down. It is one of the guides that apply across all coverage types in the travel, pet and other insurance hub.
Auto insurance premium factors
The Insurance Bureau of Canada (IBC) lists these among the factors auto insurers may consider:
| Factor | Why it matters |
|---|---|
| Your driving and insurance history (claims and convictions) | An at-fault claim or a conviction signals higher risk |
| Other household drivers listed on the policy | Their history counts too, so adding a young or newly licensed driver usually raises the premium |
| How long you have had your licence, and your licence class | Less experience means higher expected claims |
| Where you live | Collision, theft and fraud rates differ by area |
| Vehicle make, model, year and safety features | Cars that are harder to steal and cheaper to repair cost less to insure |
| How much you drive, and commercial use | More kilometres means more exposure |
| Your deductible | A higher deductible lowers the premium |
IBC also points to market conditions: inflation, the cost of repairing newer vehicles full of technology, and rising auto theft and fraud, which increase costs for all drivers.
Home insurance premium factors
| Factor | Why it matters |
|---|---|
| Claims history (water, fire, theft) | Past claims point to a higher chance of future ones |
| Cost to rebuild | The dwelling limit follows construction costs, which rise over time |
| Optional coverages added (sewer backup, overland flood, earthquake) | Each adds to the premium; none is part of a standard policy |
| Age and condition of the home (wiring, plumbing, roof, wood stoves) | IBC notes that outdated wiring can cause fires and older galvanized or lead pipes are more likely to leak |
| Location | Insurers track the number, type and cost of claims by neighbourhood |
| Loss-prevention devices (such as a monitored alarm) | Can earn a discount |
| Home and auto bundled with one insurer | Companies often offer a discount |
Why claims history follows you everywhere
Switching insurers doesn’t wipe the slate clean. Insurers check your policy and claims history when they quote, using industry databases such as IBC’s Driver and Auto Search History (DASH), which brokers and insurers use “to provide a quote, underwrite your insurance policy and determine an appropriate premium”. In British Columbia, Saskatchewan and Manitoba, basic auto insurance comes from the provincial public insurer.
You can order your own DASH report from IBC to check what insurers see.
The math on filing a claim vs. paying out of pocket
Example (hypothetical figures): $3,000 water damage claim, $1,000 deductible, and a premium increase of $270 a year for 3 years after the claim
| Option | Your cost |
|---|---|
| File the claim | $1,000 deductible + $270/year premium increase × 3 years = $1,810 total cost |
| Pay out of pocket | $3,000 one-time, no premium impact |
In this example filing still costs less than paying $3,000 yourself, but the saving is smaller than the $2,000 the insurer pays. For a claim closer to the deductible, the premium increase can outweigh the payout. How much a claim raises your premium depends on the insurer, so it is worth asking before you file. How deductible choices trade premium against out-of-pocket cost is covered in insurance deductibles explained.
Province-specific factors that affect premiums
Auto insurance:
- In BC, Basic Autoplan is bought from ICBC, and ICBC’s Basic premiums reflect where you live, your crash history, how you use your vehicle and who else might drive it
- In Saskatchewan and Manitoba, basic coverage also comes from a public insurer (SGI and MPI), so basic rates are set through those insurers’ rate processes rather than by competing private insurers
- In Quebec, the SAAQ covers bodily injury from car accidents, while private insurers sell the compulsory property damage liability coverage and optional coverage for your own vehicle
- In Ontario, insurers can’t use credit information to quote or price auto insurance
Home insurance:
- Location matters everywhere: insurers track claims by neighbourhood, so areas with more severe-weather, water or theft claims pay more
- Older homes with outdated wiring, plumbing or wood stoves can be harder or costlier to insure until they are updated
How to fight a premium increase
- Request a full explanation: Ask your insurer for the specific reasons for your increase
- Shop the market: IBC calls shopping around and comparing prices the simplest way to save. A broker can quote several insurers at once (insurance broker vs buying direct)
- Increase your deductible: When the deductible goes up, the premium goes down, as long as you can afford the deductible after a loss
- Bundle policies: Insurers often offer a discount for home and auto together
- Install telematics (auto): Several insurers offer usage-based programs that can lower premiums for careful driving; check what the program measures
- Check how credit is used: Rules on credit information differ by province and type of insurance; in Ontario it can’t be used for auto insurance, while IBC’s code of conduct covers insurers that do use it for personal insurance
Frequently asked questions
How much should home insurance cost in Canada? It depends heavily on province, home type and rebuild value; averages by province are in average home insurance cost in Canada, and auto averages are in average car insurance by province.
Will my insurance go up after I file a claim? Often, especially for at-fault claims, since claims history is one of the rating factors insurers use. The size and length of the increase depend on the insurer and the claim. For small claims, compare the payout with the likely premium increase before filing. The claim process itself is covered in how to file an insurance claim.
When to switch insurers vs stay
Switching can make sense if:
- Competitor quotes are clearly lower for equivalent coverage
- Your insurer raised rates despite no claims and no changes to your risk profile
- You’ve had poor claims service
Staying can make sense if:
- You have built up discounts, such as for being claims-free with the insurer
- Switching mid-term would trigger a cancellation fee (check your policy)
- Your renewal increase is modest and in line with market-wide cost increases
Comparing a few quotes at renewal is the most direct way to see whether your price is competitive.