Insurance companies, households, or governments may have grounds for legal action against fossil fuel companies after insured losses due to extreme weather in Canada nearly tripled last year to $9 billion, concludes a new report released this morning by Investors for Paris Compliance (I4PC).

“As climate impacts accelerate, Canadians are stuck on a cycle of more extreme weather, higher insurance claims, and increased home insurance premiums,” I4PC Senior Analyst Kiera said in a release. “This cycle is already impacting affordability and will ultimately destabilize the system unless we send the bill to those responsible—major polluters.”

“Private insurance companies ultimately cannot continue to provide coverage at affordable rates in the face of increasing climate-driven disasters—the system is already buckling,” added former California insurance commissioner Dave Jones. “Cost recovery from oil and gas companies and others causing the damages will enable investments in remediation and adaptation, shoring up the insurance system and keeping it affordable for policy holders.”

The report states that climate change “is making Canada a more expensive place to live: Extreme fire weather is more likely and more intense. Short, intense downpours are likelier, raising flash-flood risks, and hailstorms more frequent and severe. All these damage property.”

The report says severe flooding in Toronto in 2024 caused $4 billion in damage in three hours, and the wider numbers are stark. Insured losses were 12 times higher last year than the annual average from the 2000s, personal property damage claims rose 115% in just five years, and average premiums were up 77% since 2015, with regional increases ranging from 25% to 300%.

On top of those totals, “most climate damages are not covered by insurance,” the report adds. “While insured claims topped $9 billion in 2024, an estimated $24 billion in damage went uninsured. Canadian households end up paying for these damages, either directly from their own pockets, or via their taxes as governments pay to battle extreme weather,” with one-third of all federal disaster aid since the 1970s paid out in the last decade.

The report says total annual losses could hit $100 billion by 2050, while a federal government estimate put the total at $75 to $319 billion per year by 2075.

The advantage that points toward possible litigation is the relatively newfound sophistication of attribution science, which can now accurately assign responsibility for specific damages to individual climate polluters. In May, 2023, a peer-reviewed study in the journal Environmental Research Letters identified 13 oil and gas companies operating or based in Canada among a list of big carbon polluters that shared responsibility for 37% of the wildfire losses in the western regions of Canada and the United States between 1986 and 2021.

“What we found is that the emissions from these companies have dramatically increased wildfire activity,” study co-author Carly Phillips, research scientist with the U.S. Union of Concerned Scientists’ Science Hub for Climate Litigation, told CBC at the time. “I think the accountability piece for fossil fuel companies is really important and part of what makes this research unique.”

The Energy Mix Weekender dug into the legal ramifications here.

The I4PC report goes into the different approaches that attribution studies can take, and the mix of emerging legal strategies for holding polluters accountable. It cites a recent precedent in a German case that pitted a Peruvian farmer and tour guide against utility giant RWE, and the landmark advisory opinion of the International Court of Justice in July, as milestones in the effort to make climate damages enforceable.

Unlike their counterparts in some other countries, I4PC says, Canadian insurance companies have never sought compensation for damages from fossil fuel companies, “perhaps in part due to their ‘clean hands’ problem” given their “extensive fossil fuel investing and underwriting.”

But “if their insurance companies won’t recover climate costs on their behalf, Canadian households could exercise their legal rights via a class action lawsuit seeking damages from polluters,” the report says. Households facing uninsured damages from a flood, for instance, “could target one or more carbon emitters based on their historical contribution to climate change”—whether or not they were headquartered in Canada, as long as they had assets in the country.

“Aside from the damage from extreme weather events, other grounds for climate lawsuits could include rising housing insurance premiums, or lung health problems related to forest fire smoke.”

With a “massive amount of climate damages already baked in,” I4PC concludes, “the question of ‘who pays?’ will inevitably become more urgent, and the answer must be those who cause the damages in the first place. Attribution science lays the blame clearly at the feet of those most responsible, and litigation and legislation provide the tools for cost recovery.”

But “what happens next comes down to leadership,” the report adds. With most Canadian insurers “avoiding this conversation,” and many Canadian governments conflicted by their own promotion of fossil fuels, “it may therefore come down to individual homeowners choosing to join together in court to force the matter, as we saw in the early days of tobacco litigation.”