Flood insurance could soon be available to all property owners in Canada

As Nova Scotia continues to clean up after last month's destructive flooding, the federal government and the Insurance Bureau of Canada are working on a way to make insurance coverage for that kind of damage possible.

Currently, standard insurance policies generally do not cover storm surge and overland flooding because it is considered too high risk.

Craig Stewart, the vice-president of climate change and federal issues with the Insurance Bureau of Canada, said the goal is to have a national flood insurance program available by April 1, 2025.

"You will continue to buy home insurance the way you do through your existing insurer, but you will have access to comprehensive flood insurance, which will protect you," Stewart told CBC News last week.

Stewart said the collaboration with the federal government began 2½ years ago when the public safety minister called for a task force to look into how flood responses could be improved. Stewart estimates there are currently 1.5 million households in high-risk areas.

According to last year's federal budget, the government proposed to provide $31.7 million over three years, starting in 2023-24, to start a "low-cost flood insurance program, aimed at protecting households at high risk of flooding and without access to adequate insurance."

While the exact details are still being worked out, Stewart said this coverage could be around $300,000, with a deductible "which will have to be affordable." He said there are talks about capping the premiums so there's an incentive to pay for the protection if you're in a high-risk area.

"You're paying for the risk you face, but it's not going to bankrupt you. So the idea is to cap the coverage to keep the program affordable," Stewart said.

It's not clear how much more it will cost to include flood protection on an insurance policy. Stewart said it would depend on the contents of the home, how much repairs would cost and the level of risk.

"So what you'd probably be looking at is numbers from many hundreds of dollars a month, up to thousands and thousands of dollars a year, with some sort of cap based on either the income of the family or the value of the house," Stewart said.

Stewart said he doesn't know what would happen to property owners who choose not to opt into the flood coverage.

"If you don't opt in, if you decide that you don't want to get this insurance and pay for it, you can't expect to be bailed out. We expect that the changes to disaster financial assistance will happen at the same time. Now that will be decided, though, on a province by province basis," Stewart.

In an email to CBC News on Tuesday, the Department of Public Safety said flood-related damages to residential properties will no longer be eligible for federal cost sharing under the disaster financial assistance arrangements once flood insurance is considered available and affordable to Canadians.

The department said cost sharing for other types of government support, like evacuations, emergency response, psychosocial support and clearing transportation routes will remain eligible.