October storms in Southern British Columbia, Canada, resulted in over $110 million in insured damages, as per initial estimates from Catastrophe Indices and Quantification Inc. (CatIQ).
In response to these escalating costs, insurers urge the federal government to move forward with the implementation of a National Flood Insurance Program to better protect homeowners, the Insurance Bureau of Canada (IBC) has stated.
The Category 4 atmospheric river on October 18 to 20, 2024, led to intense flooding which resulted in significant flood damage to properties in Coquitlam, Burnaby, West Vancouver, North Vancouver, Metro Vancouver and Surrey.
On the evening of October 20th, North Vancouver declared a local state of emergency due to severe weather conditions. Intense rainfall and strong wind gusts caused multiple sewer backups. Additionally, rivers overflowed, flooding basements, roads, and parking garages.
“Damaged property can be repaired or replaced, however our thoughts continue to be with the families and friends who lost loved ones as a result of this storm,” said Aaron Sutherland, Vice-President, Pacific and Western, Insurance Bureau of Canada (IBC).
He continued: “Over the past few weeks, insurers have been on the ground working to assist their customers in the recovery process following this latest flood event. Reconstruction will take time, and insurers will be there every step of the way.”
Although homeowners in the flood-affected areas generally have access to residential flood insurance, those with properties most vulnerable to flooding may find it difficult or impossible to obtain.
Consequently, damaged homes without insurance may be forced to rely on government disaster financial assistance, if available, for their recovery.
Today, roughly 10% of Canadian households currently lack access to flood insurance and the crucial financial protection it offers.
To address this, Canadian insurers have urged the federal government to provide complete funding for the National Flood Insurance Program.
This measure would ensure that all Canadians, regardless of location or income level, have the opportunity to safeguard themselves from the financial burdens associated with flood risk.
Jason Clark, National Director, Climate Change Advocacy, IBC, stated: “While insurers will be paying out millions of dollars in claims for this event, we expect total losses to be far higher due to the number of uninsured properties, as well as damage to public infrastructure.
“Current government disaster relief programs serve as a last line of support for people who are uninsured or underinsured. They do not provide the same level of financial protection as insurance, and its taxpayers that ultimately fund relief payments.
“That’s why for nearly a decade, IBC and its members have been calling on governments to take action to adapt to Canada’s changing climate and to move forward on the creation of a National Flood Insurance program to better protect homeowners from the risks they face.”
Insurers are advocating for a National Flood Insurance Program to proactively address the financial burden of flood disasters. This program would offer financial protection to high-risk households while mitigating the strain on federal and provincial government budgets currently reliant on reactive disaster assistance.
By shifting to a proactive insurance model, the program aims to provide a more cost-effective solution for managing the economic impact of floods.
Despite the federal government’s commitment to establishing this program, it remains underfunded.
“With climate change increasing the frequency and severity of disaster events, Canada needs to reduce the number of families and communities that are being impacted by disasters, as well as enable better prevention, response and recovery from these catastrophic events,” added Clark.
He continued: “In June 2023, the federal government launched an impressive National Adaptation Strategy, but little progress has been made by all orders of government towards achieving its targets for risk reduction. As costs mount from climate-fueled disasters, Canada needs to get ready for the next disaster. This is not the time for finger pointing. This is the time for governments and the private sector to work together to better protect Canadians and our communities.”
Insured losses related to severe weather in Canada now regularly exceed $3 billion annually, compared to the previous average of $701 million per year recorded between 2001 and 2010. This year, they have already set a new record, reaching over $7.7 billion.
