As we begin 2025, the insurance landscape is poised for a wave of significant changes that will impact homeowners, business owners, and drivers across Canada. From shifting climate risks to AI-driven coverage personalization, the industry is evolving at a rapid pace. To navigate these changes, it helps to have a clear view of what’s coming—and why these adjustments matter. Andrew Smith of Andrew Smith Insurance Inc., a branch of The Co-operators, shares his expert insights on what policyholders can expect in the year ahead.
Home Insurance: Adapting to Climate Realities
Climate change isn’t a distant threat; it’s a present-day reality reshaping home insurance policies across the country. Increasingly severe weather events—from catastrophic floods to wildfires—have insurers revisiting their risk models. “In 2025, homeowners should expect to see an even greater emphasis on flood and wildfire coverage,” says Smith. “While these risks have always been a concern, the frequency and severity have forced insurers to adjust rates and coverage options.”
For some, this might mean higher premiums or policy limitations in high-risk areas. But proactive homeowners will find opportunities, too. “Many insurers are incentivizing risk mitigation measures, such as installing sump pumps or fire-resistant materials,” Smith notes. “These can lower premiums and make homes safer.”
Tech advancements are also set to play a larger role. Smart home devices, like leak detectors and security systems, will likely influence coverage offerings and costs. “The more data insurers can gather about home safety measures, the more personalized and accurate coverage becomes,” Smith explains.
Business Insurance: Cyber Risks and AI Integration
In the business world, cyber risk continues to rise. With more companies relying on digital infrastructure, ransomware attacks, data breaches, and other cyber threats are top concerns for 2025. “Expect to see increased emphasis on cybersecurity insurance,” says Smith. “Policies will likely expand to cover not just reactive measures like data restoration, but also proactive measures, including staff training and security audits.”
Artificial intelligence will also shape business coverage in surprising ways. Insurers are increasingly using AI to predict risks, price premiums, and process claims with greater accuracy and speed. “For business owners, this could mean faster claims processing and more customized policies,” Smith explains. However, AI’s role isn’t without its challenges. “There’s a concern about transparency and fairness in AI-driven underwriting. Business owners will need to keep an eye on how AI makes decisions that affect their coverage.”
Auto Insurance: Personalized Rates and EV Adjustments
For drivers, the road ahead brings its own set of changes, largely influenced by technology and the continued growth of electric vehicles (EVs). “Telematics will be at the forefront,” Smith states. “More insurers are offering usage-based insurance, where your premium is determined by your driving habits—speed, braking, and even the time of day you drive.” This type of coverage offers opportunities for safer drivers to save, but it also raises questions about data privacy.
EV owners can expect shifting rates and specialized coverage options. “The costs associated with EV repairs and the unique risks they pose, like battery fires, are leading to policy adjustments,” Smith explains. “At the same time, incentives for EV adoption may still be present, such as lower premiums for eco-friendly drivers.”
Additionally, AI will impact auto claims in new ways. From AI-driven appraisals after a collision to automated claims approval processes, speed and accuracy are set to improve. “But remember, while AI speeds up processes, it can’t replace human judgment entirely,” Smith cautions. “Complicated claims still benefit from personalized attention.”
Balancing Technology with Personalized Care
As we embrace these changes in home, business, and auto insurance, one thing remains constant: the importance of personalized service. “Technology is transforming how we offer and manage insurance,” says Smith. “But in times of crisis or uncertainty, nothing replaces the expertise and care of a trusted advisor. Whether you’re protecting your home, your business, or your vehicle, having someone who understands your unique needs will always matter.”
So, as 2025 unfolds, policyholders should prepare for a more tech-driven, data-oriented insurance experience—but never lose sight of the value of human connection and tailored advice.