Experts say a government-industry disaster insurance program is long overdue.
Storms, floods and wildfires have led to Canada’s most expensive year for catastrophic losses on record, costing the insurance industry more than $7.6 billion so far in 2024.
The report says five major catastrophic events — a Calgary hail storm, flooding in Quebec and Ontario, a wildfire in Jasper, Alta., and winter storms across B.C., Alberta and Saskatchewan — combined to outpace annual losses in every year on record, including 2016, the year a wildfire tore through the community of Fort McMurray.
Part of the increase in costs is climate and growing urban environments. As more concentrated bursts of rain fall across Canada, they are falling on increasingly paved surfaces, which often drain into aging sewers. When they back up, they go into basements, which amid a housing crisis, tend to increasingly be renovated as a suite.
“It wasn't big profits for the insurance company that was being raked in with these high premiums,” said Campbell, who produced the report as a senior fellow at the C.D. Howe Institute. “It was just higher premiums to cover higher losses.”A big reason insuring for catastrophic events is so expensive in Canada is because there is no federal partnership to help absorb costs, said Campbell.
Small- and medium-sized insurers will be either forced to keep that added risk on their own books or download costs to businesses and homeowners, he added. A spokesperson with the Bank of Canada declined Glacier Media's request for an interview, instead pointing to a flood risk and residential lending report released by the bank in January 2024 in which researchers simulated the impacts of a one-in-100-year flood event across several big Canadian cities.
According to the Insurance Bureau of Canada, about 1.5 million homes are already in high-risk flood zones that prevent them from getting adequate insurance. Models not keeping up with disaster Despite the billions of dollars at stake, experts say risk models are struggling to keep up with a changing world.
Getting insurance across much of the province became more expensive and harder to get. Many insurers decided they didn’t want to renew existing plans, Stewart said.
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