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Some Canadian homeowners can’t get insurance as weather-related disasters increase

by Celia

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.

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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.

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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.

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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.

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