The Conference Board of Canada published a new research report in April, entitled Disaster Recovery, Toward a Resilient Canada. In it, the board’s researchers say Canada needs clearer information on the likelihood of disaster events, the related financial risks and how to better prepare for their impacts. “Insurance companies and government financial assistance programs need to simplify and strengthen their coordination,” the report states.
“Individuals and communities aren’t sufficiently risk aware, often because they lack access to necessary information,” they add.
The report is a summary of stakeholder discussions coordinated in partnership with the Canadian Red Cross, Insurance Bureau of Canada and Public Safety Canada. In those discussions, participants contributing to the report argued that Canadians don’t make the best use of available insurance products – a situation stemming from product complexity and lack of clarity regarding what situations and circumstances are covered.
“Participants observed that policyholders often try to better understand their insurance coverage only when in the middle of a disaster,” they write. The stakeholders proposed a broad-based effort to improve financial literacy and risk awareness. “Insurance companies need to do more to clarify the exact coverage and exclusions of insurance using less complicated language,” they write.
The report also discusses the lack of coordination between private insurance coverage and federal assistance programs. “Specific concerns included the level of detail, overlap and large amount of documentation and information required to apply for and receive insurance and federal assistance coverage,” they write. “This process creates long wait times to receive crucial support and causes significant confusion for individuals.”
They add that because securing these supports under stress is difficult for homeowners, the financial support is often poorly used – a situation exacerbated by the fact that some mortgage agreements and building codes require homes to be built back in exactly the same location, with the same characteristics. “Participants saw this requirement as limiting efforts to build resilience to future disaster events.”