B.C. flooding: How will insurance companies manage as climate risks get worse?

Historic flooding in British Columbia is the latest reminder that insurance companies will continue to face challenges as the threat of climate change grows.

The cost that comes from Canada’s changing climate has been in the spotlight for years, be it from wildfires or ice storms.

But historically, water damage has been the most expensive — and British Columbia, which dealt with severe wildfires this summer, is now dealing with historic flooding in several towns following torrential downpours.

In the past, severe Canadian floods have come with price tags that can range into the billions, and with extreme weather events becoming more common, insurance companies will have new challenges on their hands to keep costs low, experts say.

“Over this past decade, the insurance industry has been paying out on average annually about $2 billion in severe weather damages,” said Rob de Pruis, director of consumer and industry relations with the Insurance Bureau of Canada (IBC).

“In the decade before, that number was just over $600 million, so we’ve seen some very significant increases.”

In several parts of B.C., severe rainfall over Sunday and Monday has washed away roads, submerged cars and spread debris everywhere.

Some residents have been forced to evacuate their homes, including the entire community of Merritt. It is not known when residents will be allowed home.

At least one person has died, and search teams have started to look for people who might have been lost in the landslides. Canada’s two biggest railways have reported serious damage to their networks.