Amid wildfire season, the Insurance Bureau of Canada (IBC) is reminding Canadians and policy makers to focus on another area of risk, saying today 90 per cent of homeowners have access to flood insurance, but millions remain unprotected.
Ten years ago, they say catastrophic flooding captured national attention when, in June and July 2014 Calgary was evacuated and the Greater Toronto Area suffered from the worst flooding since Hurricane Hazel in 1954.
Specifically in June that year 80,000 people were evacuated from Calgary and the surrounding areas. Five people died. In July, separate storm cells over the GTA caused record levels of rain. “While damage caused by fire has long been covered under most home insurance policies, overland flood insurance was not generally available at the time of the 2013 floods,” they write.
In total, the two floods resulted in $3.1 billion in claims. Insurers responded to the conversation about the insurance protection gap at the time, by developing Canada’s first overland model flood insurance product within two years.
Since 2013 there have been 35 catastrophic flooding events in Canada, in which insured losses exceeded $30 million per flood. Today, they add, 30 insurers across the country operate in the flood insurance market; about 90 per cent of homeowners can access the product, but millions today remain unprotected.
“In the 2023 Budget, the federal government announced its intention to partner with provinces and territories to launch a low-cost flood insurance program for those at the highest risk of flooding,” the statement continues.
“We hope this program can be up and running in two years,” says the IBC’s president and CEO, Celyeste Power, who added that establishing a national flood insurance program has never been more important. The ongoing protection gap still exists, for example, for those located in known floodplains who are considered too high of a risk for insurance companies to underwrite.