Insured losses topped $3.1B for the second straight year, says Insurance Bureau of Canada.
Last May, after a period of heavy rain, Humberto Pinochet observed helplessly as floodwater came into his artist’s studio and home in Baie-Saint-Paul, Que.
Pinochet informed, he saw the level of the water increasing.
His home was completely destroyed last fall.
According to a new report by the Insurance Bureau of Canada, floods like the one in Baie-Saint-Paul, about 90 kilometers northeast of Quebec City, helped drive up insurance claims from extreme weather in 2023 to the fourth-highest total on record.
In Canada, climate change has made extreme weather very common and the accompanying disasters such as floods and fires have made home insurance more expensive — if you can get it all.
In whole, insured losses from extreme weather events in Canada exceeded $3 billion for the second straight year.
The report highlights concern about the growing economic cost of weather-related disasters made more frequent and severe by climate change and the increasing cost of insurance coverage for homeowners.
In some cases, homeowners are having a hard time to get coverage at all.
According to the report the wildfires in Shuswap and Okanagan, B.C., were far and away the costliest source of insurance claims.
But a combination of storms, flooding and fires across the country contributed to what amounted to the fourth priciest year for insured losses.
It’s very important to note these losses are coming from not one single type of event, said Craig Stewart, the group’s vice-president of climate change and federal issues.
They’re coming from floods, wildfires, hail storms, hurricanes and literally they’re happening from coast to coast and they’re escalating.
In all, four out of the five priciest years on record (adjusted for inflation) have been in the past decade, with the only exception being 1998, the year of a devastating ice storm in Quebec.
While wildfires wreaked havoc on many communities this summer, flooding remains the costliest weather-related event.
Stewart said, the high likelihood of flooding in some areas has made insurance companies reluctant to offer coverage.
People are openly living on flood plains across the country, he said. For flooding we’re already seeing a shift in the insurance market.
There are about 1.5 million homes across the country which simply cannot get affordable flood insurance presently.
According to Statistics Canada, home insurance and mortgage insurance have climbed an average of 33 per cent over the five-year period from April 1, 2018, to the same month in 2023.
Stewart’s group has been pressing the federal government to put in place a national flood insurance program which would provide coverage in high-risk areas. There’s no fixed timeline for when that will be in place.
A spokesperson from the minister of Emergency Preparedness Joanna Kanga said the federal government continues to engage provinces, industry stakeholders, territories and Indigenous representatives on the development and implementation of the low-cost flood insurance program.
In 2022, The federal government announced its first climate adaptation strategy aimed to make communities more resilient to weather disasters.
Pinochet, a famous artist whose paintings document the county said, he was unable to get flood insurance because his home was located on a flood plain, which is in a low-lying area between two rivers.
The municipality ended up stepping in to buy the property, and he received an amount as part of a disaster-relief program.
Presently Pinochet rents a place further from the water.
A federal government plan is needed to make sure property owners have coverage, but Canadians need to take precautions themselves, says Anabela Bonada, a research associate at the University of Waterloo’s Intact Centre on Climate Adaptation.
Insured losses reflect a small part of the damage, which was caused by extreme weather and highlight the need for governments to put more funds into adaptation measures, said Ryan Ness, a research director with the Canadian Climate Institute.
A report by the institute estimated that every dollar which was invested in climate adaptation, such as designing roads to make them stronger to flooding, will return $13 to $15 in avoided costs.
