Concerns over insurance coverage for homeowners in Greater Victoria are escalating as water levels and average temperatures rise, reflecting broader apprehensions about climate change-fueled disasters across the province.
Mica Munro, 34, and Jasper Smith, 32, made headlines after purchasing a $1 million house in Saanich in May 2022 and initially opting for comprehensive home insurance, including earthquake coverage. However, the following year, they chose to forego earthquake insurance, significantly reducing their home insurance expenses. Despite the savings, Munro and Smith, like many homeowners, remain apprehensive about the potential impacts of climate change on their property.
A recent survey from RatesDotCa, released on June 29, 2023, revealed that 35% of Canadian homeowners factor in the risks associated with climate-induced weather patterns when purchasing a home, with this consideration rising to 64% among homeowners aged 18 to 34.
In 2023, natural disasters and severe weather caused over $3 billion in insured damages in Canada for the second consecutive year. Wildfires, in particular, have proven to be costly, with last August and September’s Okanagan and Shuswap fires incurring $720 million in insured damages, making it the most expensive insured event ever recorded in the province.
While Vancouver Island may not experience the same hot and dry climate as the Okanagan, wildfires remain a concern. The Muir Creek wildfire north of Shirley and a fire on the Malahat during a record-breaking hot streak last summer underscore the region’s vulnerability to climate-related disasters.
Although climate change may not directly cause earthquakes, it can trigger “slow earthquakes” and influence other seismic activities. Matt Marcoux, a master’s student at the University of Victoria studying the impacts of climate change on home insurance, emphasizes the importance of earthquake insurance, despite its cost. He suggests that homeowners prioritize coverage for losses they cannot recover from, such as earthquake damage.
Stephanie Lumley, a homeowner in Sooke, highlights the importance of insurance after a 120-foot tree fell through her roof during a windstorm in January. While Lumley’s insurance covered the repairs, she remains concerned about the increasing frequency and severity of weather events.
Insurance companies now utilize reinsurance to mitigate the financial risks associated with large natural disaster premiums. Marcoux explains that the industry has undergone significant shifts, with insurance rates expected to decrease as coverage becomes more affordable and readily available.
While insurance policies provide a sense of security for homeowners, the escalating climate crisis underscores the importance of proactive measures to mitigate risks and protect communities against future disasters.
