Spring flood risks in Canada raise concern about insurance for homeowners
Global News
Flooding is the biggest under-insured climate risk in Canada, said Victor Adesanya, vice-president of insurance at DBRS Morningstar, especially during the spring thaw.
As the spring season brings higher flood risk to Canadians, as seen in British Columbia recently, experts say many homeowners remain without adequate insurance to cover extreme weather’s damage to their homes.
“I would say that Canadians in general are not truly aware of the risks that their homes are exposed to, and the exposure they have to extreme weather events and the potential losses they could experience,” said Michelle Laidlaw, associate vice-president of The Co-operators Group Ltd.’s national product portfolio.
Flooding is the biggest under-insured climate risk in Canada, said Victor Adesanya, vice-president of insurance at DBRS Morningstar, especially during the spring thaw. IBC said more than 1.5 million households in Canada are “highly exposed” to flood risk.
In comparison, as wildfires in Alberta have forced evacuations and filled the skies with smoke, the Insurance Bureau of Canada said standard homeowner’s insurance covers fire damage as well as the costs of mass evacuations.
Storm surge is another big under-insured risk, said Nadja Dreff, senior vice-president and head of Canadian insurance also at DBRS Morningstar. The Atlantic is at particularly high risk of storm surge, which tends to be in the aftermath of hurricanes or other such storms, said Adesanya.
The risks for these two events are only growing with climate change, said Dreff.
“There is very much a need for this coverage. And yet, we still haven’t gotten to that level where we can say the insurance sector completely is able to cover all the risks,” she said.
IBC has said overland flood coverage for damage from overflowing bodies of water is generally only covered with an add-on to insurance plans. It may not even be available if you live in a known flood plain, it said.