Over 1.5 million high-risk households cannot obtain affordable flood insurance
For the second year in a row, Canada exceeded $3 billion in insured damage from natural catastrophes and severe weather events. Nationally, insured damage for severe weather events reached over $3.1 billion in 2023,
In fact, 2023 is now the fourth-worst year for insured losses in Canada. This grim statistic highlights the financial costs of a changing climate to insurers, governments and taxpayers.
While 2023 was a record-breaking year for wildfires, flooding also continued to cause destruction in nearly every region across Canada.
As a result of escalating losses and revised risk modelling, Canada is viewed now as a riskier place to insure. Consequently, numerous Canadians cannot access flood insurance.
“The federal government committed to a national flood insurance program in last year’s Federal Budget. However, progress has stalled, leaving too many Canadians vulnerable to the effects of our changing climate,” said Craig Stewart, Vice-President, Climate Change and Federal Issues, Insurance Bureau of Canada (IBC).
“Once launched, this program would provide Canadians living in high-risk areas with affordable financial protection and peace of mind when a flood strikes. Details of the program must be shared with our industry and the provinces this winter if it’s to be operational before the next federal election.”
“Canada’s property and casualty insurance industry has offered to support a comprehensive and cost-neutral flood insurance program that will replace costly Disaster Financial Assistance and save governments and taxpayers money. After seven years of study, government officials and home insurance professionals agree on this solution. Canadians now need the federal government to move forward with this program and announce details in the 2024 Federal Budget. The homes and financial health of over 1.5 million Canadians are at high and growing risk.”
Noteworthy severe weather events last year include the Atlantic Canada cold snap; Ontario and Quebec spring ice storm; the Tantallon, Nova Scotia, wildfire; Nova Scotia flooding; Prairies summer storms; the Winnipeg hailstorm; Ontario severe summer storms; the Okanagan and Shuswap, BC, area wildfires; and the Behchokǫ̀-Yellowknife and Hay River, NWT, wildfires.
Insured Damage for Severe Weather Events in 2023
February 3–5 |
Atlantic Canada cold snap |
$120 million |
April 5–6 |
Ontario and Quebec spring ice storm |
$330 million |
May 28–June 4 |
Tantallon, Nova Scotia, wildfire |
$165 million |
June 18–July 26 |
Prairies summer storms |
$300 million |
July 20–August 25 |
$340 million |
|
July 23 |
Nova Scotia flooding |
$170 million |
August 13–September 16 |
Behchokǫ̀-Yellowknife and Hay River, NWT, wildfires |
$60 million |
August 15–September 25 |
Okanagan and Shuswap area wildfires |
$720 million |
August 24 |
Winnipeg hailstorm |
$140 million |
With today’s extreme weather events, insured catastrophic losses in Canada now routinely exceed $2 billion annually, and most of it is due to water-related damage.
Over the last decade, there have been more than 35 catastrophic flooding events across Canada in which insured losses exceeded $30 million per flood. Total insured losses from these events have averaged close to $800 million annually over the last decade.