Insurance Crisis in B.C.: Why Some Homes May Become Uninsurable

British Columbia’s housing landscape—already strained by affordability—faces a new threat: insurance may soon vanish or become unaffordable for many. Climate risk, soaring premiums, limited coverage options, and mortgage restrictions are converging to create a potentially dangerous tipping point.

The Cost of Climate Change: A Surge in Insurance Claims

2024 was a record-breaking year. Insured damage across Canada from severe weather events hit over $8.5 billion, nearly tripling 2023's total and dwarfing the $701 million annual average of the early 2000s. B.C. was a major contributor to that spike.
(Reddit)

2025 added further pressure. Premiums rose another 5.8% on average, with particularly steep increases for homes featuring fire-prone materials like cedar siding or vinyl, or those using wood heat systems.
(Oak Bay News)

Strata (condo/townhouse) insurance has been especially brutal: rate hikes of 50% to 300%, with one Abbotsford example reaching nearly 800%, have made collective ownership untenable for some.
(BC Chamber of Commerce)

When Insurers Pull Back: Risk-based Withdrawal and Rising Denials

Insurers are tightening coverage. In California, wildfire-exposed zones have become nearly uninsurable—some companies refuse to renew or issue policies at any price. A similar pattern is emerging in Canada.
(Financial Times)

Insurers now deploy localized risk models and climate forecasting, adjusting coverage geography-based and property-wise—making high-risk homes harder, or impossible, to insure.
(Policy Options)

For floodplain properties, the situation is doubly dire: not only can insurance be unavailable or costly, but mortgage financing through CMHC is increasingly restricted—making such homes effectively unmarketable.
(Policy Options)

Mortgage Barriers Hit High-Risk Areas Too

Insurance refusal can cascade quickly into mortgage problems. With many lenders (including CMHC) requiring insurance for loans, denial of coverage may mean mortgage denial—rendering some homes unsalable. As extreme weather risks increase, so does the underwriting scrutiny.
(Policy Options)

Is There a Silver Lining? Some Strata Might See Relief—For Now

Interestingly, 2025 has seen a softening in strata insurance premiums for many buildings. FirstService Residential reports average rate reductions of 19%, with some cases reaching 24%, despite rising construction costs. Competition recovery from new entrants and higher underwriting gains are cited as causes.
(Business in Vancouver)

This relief is fragile—and streaky. It mainly benefits concrete high-rises versus wooden frame buildings, and only certain strata complexes. It's a pause, not a solution.
(HUB International)

Why B.C. Homes Are Facing an Insurance Cliff

A perfect storm of risk factors:

• Climate acceleration—wildfires, floods, storms are trending more frequent and intense.
  (Park Insurance)

• Coverage pullback—insurers raise premiums selectively, deny risky properties, and exit zones.
  (Financial Times)

• Mortgage exposure—homes stripped of insurance may also lose financing options.
  (Policy Options)

• Strata cost burden—some condo associations face near collapse from draconian rate shocks.
  (BC Chamber of Commerce)

• Temporary relief in strata market—recent softening may delay crisis, but not prevent it.
  (Business in Vancouver)

Who Is Most at Risk?

• Homes on wildland-urban interface fringes—cedar siding, wood shingles, outlying fire zones.

• Floodplain properties—even mitigation may no longer suffice.
  (University of California)

• Older strata buildings with poor loss histories or heavy claims.

• Woodframe suburban or rural homes with low defensibility.

Lessons from Abroad

• California: Insurers are abandoning fire-prone zones; homes there are becoming uninsurable.
  (HUB International, University of California)

• Australia: Forecasts suggest as much as 4% of homes could be uninsurable by 2030, with high-risk pockets reaching 90% in some regions.
  (The Guardian)

Similar pressure is arriving in B.C.—and if left unaddressed, coverage gaps may become systemic.

What Comes Next: Steps That Can Help

Homeholders Can:

• Harden properties: replace cedar/vinyl, install fire-resistant features, create defensible spaces.
  (BCBusiness, Park Insurance)

• Work with brokers—not online platforms—to find coverage and understand risk.

Governments Should:

• Offer insurance backstops or public reinsurance in high-risk zones.
  (Western Coast Insurance Services, Policy Options)

• Build community resilience—fire breaks, flood infrastructure, stricter building codes.

• Enhance data transparency for climate risk, insurance availability, and premiums.

The Bottom Line

British Columbians are edging into a future where owning a home doesn't guarantee insurability. Fires, floods, and storms are reshaping risk—and insurance markets are responding, sometimes by pulling up the drawbridge altogether.

For some, this means sky-high premiums; for others, cannot be insured—even at any price. The threats are mounting; the options are narrowing. Policy action, community hardening, and smarter risk modeling aren’t luxuries anymore—they're urgently needed shields, or we’ll face uninsurable homes becoming the norm rather than the exception.

• Financial Times

• The Guardian