The Insurance Bureau of Canada has reported that extreme weather events in 2023 propelled insurance claims to the fourth-highest total on record. The impacts of climate change and the subsequent rise in insurance costs for homeowners are evident, with insured losses exceeding $3 billion for the second consecutive year.
Floods, such as the devastating incident in Baie-Saint-Paul, Quebec, contributed significantly to the surge in claims. Residents, like artist Humberto Pinochet, experienced firsthand the destructive force of flooding, leading to the complete loss of his home last fall.
Notably, the wildfires in Shuswap and Okanagan, British Columbia, topped the list as the costliest source of insurance claims. However, a combination of storms, flooding, and fires across the country contributed to the overall financial impact, making it the fourth most expensive year for insured losses.
Craig Stewart, the vice-president of climate change and federal issues for the Insurance Bureau of Canada, emphasized that these losses stem from various weather-related events happening nationwide. He underscored the escalating frequency and severity of floods, wildfires, hailstorms, and hurricanes, making it imperative to address the economic costs associated with climate change.
Flood-related challenges persist as high-risk areas face difficulties obtaining affordable insurance coverage. Approximately 1.5 million homes in flood-prone regions across the country currently lack accessible flood insurance. Over the past five years, home insurance and mortgage insurance have seen an average increase of 33%, according to Statistics Canada.
The Insurance Bureau of Canada has been advocating for a national flood insurance program, urging the federal government to implement measures that would provide coverage in high-risk areas. While the government announced its first climate adaptation strategy in 2022, there is no firm timeline for the establishment of such a program.
Property owners, however, are encouraged to take individual precautions. Anabela Bonada, a research associate at the University of Waterloo’s Intact Centre on Climate Adaptation, emphasized the importance of self-protection measures, such as maintaining vegetation in wildfire-prone areas and installing backwater valves and sump pumps in flood-prone regions.
Insured losses represent only a fraction of the overall damage caused by extreme weather, underscoring the need for increased government investment in adaptation measures. A report by the Canadian Climate Institute estimates that every dollar invested in climate adaptation could yield $13 to $15 in avoided costs, emphasizing the potential return on proactive investments in resilience measures.
