New tools to enhance resilience in the residential construction sector

Canadian homeowners are showing a willingness to invest in improving the climate resilience of their homes—but homebuilders remain hesitant to offer sturdier construction options. According to experts, insurers could play a critical role in bridging this gap by helping to disseminate information across the industry. 

On July 11, the Institute for Catastrophic Loss Reduction (ICLR) hosted a webinar presenting early findings from a working group focused on resilient home construction. Insurance Portal attended the event. 

The ICLR’s mission is to encourage the adoption of best building practices to mitigate losses during climate-related disasters. “Homes are the primary driver of loss during a disaster event,” says Dan Sandink, the Director of Research at the institute. 

To address this, the ICLR offers guides outlining accessible building materials and techniques that can increase a home’s resilience to wildfires, high winds, hailstorms and flooding—ultimately reducing the extent of damage. 

But current practices in home construction may be exacerbating the problem, notes webinar host and Chief Engineer Keith Porter. “We believe the building code is contributing to natural disasters. We build for least first cost, even if that makes new buildings more vulnerable to natural disasters,” he says. 

Task force 

For years, the ICLR focused on traditional academic knowledge transfer—producing guides and proposing new standards to national associations. But in 2020, its board of directors encouraged a shift in strategy. 

“We just have not figured out how to make them useful and practical to that industry,” Sandink explains. 

One key challenge is that most new single-family homes in Canada are built by small- and medium-sized enterprises (SMEs). These smaller builders are often reluctant to incorporate resilient materials, believing consumers are unwilling to pay the premium. 

To address this, the ICLR, affiliated with Western University, launched a new working group in early 2024 to focus on resilient homes. The group brings together insurance industry representatives and homebuilders from the Canadian Home Builders’ Association (CHBA). 

With a two-year mandate, the group has already conducted a consumer survey to assess the level of interest in climate-resilient materials and construction techniques. During the webinar, Dan Sandink and his colleague Tamara Mosqueda presented the results of a survey on consumer interest in adopting building materials and techniques better suited to climate change. 

“The insurability of homes is a concern for insurers as well as home builders. They can’t sell homes that are not insurable,” Sandink says. 

According to CHBA members, resilient construction practices should remain voluntary. “We want to look for opportunities, for incentives for consumer interest and support builders in using those as methods for marketing resilience options,” he adds. 

Aligning supply and demand 

Builders often argue that consumers aren’t asking for resilience upgrades—or won’t pay extra for them. But Sandink notes that the technological solutions are already available. When consumers understand the benefits—particularly regarding insurance coverage—they are generally willing to spend more. 

Most respondents to the ICLR survey indicated a willingness to pay up to $5,000 more for resilience measures. When broken down further, this tolerance ranges from 1 to 5 per cent of the total home price. 

Insurers can support this transition by adjusting premiums for better-built homes. Companies like Aviva, Co-operators and Wawanesa already offer policy endorsements that improve reconstruction quality after a loss. 

To support adoption, the ICLR is recommending a tiered approach with bronze, silver and gold levels of resilience. Even the bronze tier provides meaningful improvements without significantly affecting the final cost of construction. 

Later this year, the institute will publish a study titled Climate adaptation seems to have a market value that greatly exceeds its cost, authored by the three researchers who participated in the webinar. Among homeowners in the Calgary area, some expressed willingness to invest up to $20,000 in hail protection. 

Calgary-based Avalon Master Builder co-president Chris Williams, quoted during the session, captured the economic logic: “I build net-zero homes because the energy savings offset the added mortgage cost. If resilience features led to insurance savings that matched their added cost, I’d build resilient homes too.” 

Rebuilding stronger after a loss 

Standard insurance policies typically require homes to be rebuilt to their pre-loss condition. Insurance Portal asked whether more robust reconstruction could be done without affecting premiums or coverage. 

Sandink pointed to a past ICLR initiative called Insurers Rebuild Stronger Homes, which found that some insurers do support resilience upgrades during renovations. However, policy wording can present a barrier, and negotiating reinsurance contracts is one potential solution. 

By lowering the average cost per claim—through recycling or reuse of materials—some insurers are reinvesting savings into resilience-focused projects. “Another practice that we’ve seen applied is optional endorsements. For example, Wawanesa offers an optional endorsement that you can buy that will allow, I think, $25,000 to be released after a loss event that you can invest in better materials,” Sandink explains. 

“Other insurers are just applying these practices by default. These might include $2,500 for a roof, $1,000 for better siding in Calgary, or $1,000 or more for basin flood protection—just through their policy approaches. That might mean renegotiating reinsurance contracts and so on. So we are seeing some shift in the industry,” he says. 

Citing ICLR founder Paul Kovacs, Sandink adds: “Insurers need to move away from strictly remittance and payment for loss and move more towards sort of a more comprehensive view of risk and risk mitigation to help ensure that homes remain insurable. We’re starting to see that in the market and we’d like to facilitate that also.” 

Hail and wildfire risks 

The issue of hail damage remains a significant concern in Calgary, where a 2024 storm caused $3 billion in claims. Sandink notes that the next iteration of Canada’s national building code will include elements of resilient construction—but that provinces like Alberta must lead on hail-specific updates. 

For instance, vinyl siding is popular due to its low cost and smaller carbon footprint compared to cement-based composites. However, it offers poor resistance to hail. “It’s up to Alberta to update its own building code to address this,” says Sandink. 

One webinar participant from Kamloops, B.C., shared his experience after nearby wildfires in 2023. Aware of the FireSmart standard—which recommends 3-millimetre metal mesh vents to block embers from entering attics—the homeowner sought out roofers who could install them. None offered such vents. This highlights a persistent gap in information sharing, notes Porter. 

If contractors are aware of available products, they’ll be better equipped to educate consumers on the value of investing a few extra dollars in protecting their homes, says Sandink. “And if customers request these products, contractors will order them—and suppliers will adjust.” 

Finally, Porter noted that the ICLR is working on an interactive online map that will help users assess their local exposure to natural hazards and access information about available assistance programs at the municipal, provincial and federal levels.