A new study from the University of Waterloo’s climate adaptation centre has found that Canadian homes aren’t set up for protection against worsening weather caused by climate change.
Researchers discovered that the number of homes in Canada that are uninsurable from a flood-risk perspective is growing. Insurance claims from weather-related problems, like flooding, have more than quadrupled over the past decade. And about 1.7 million households are at risk of flooding, according to the coast-to-coast study.
The Insurance Bureau of Canada says insurance payouts from extreme weather have more than doubled every five to 10 years since the 1980s. For the last nine years leading up to 2017, payouts for catastrophic losses have averaged $1.8 billion per year. Water-related losses were a significant driver in the increased payouts, the study says, accounting for more than 50% of the increase.
This is after increases in real estate prices are factored in.
"All of this data is corrected for inflation, and it's corrected for wealth creation," study coauthor David Feltmate told the Canadian Press. "This is an actual increase in the amount of money being paid out."
The study highlights several types of flood risks, including:
- Riverine flooding (where water levels in watercourses rise and spill over their banks, which can be caused by extreme rainfall, snowmelt, ice build-up and debris jams).
- Overland flooding (where excess stormwater flows over private properties, entering homes through the lowest building openings, such as basement windows and doors).
- Sewer back-up (where storm and/or sanitary sewer systems are overloaded and can back-up into basements).
- Foundation system failures (when foundation drainage systems fail and water enters basements though foundation drains / seeps through the foundation walls).
These types of flooding aren't often included in standard home insurance coverage. If they’re offered at all, they’re usually for-purchase endorsements, or add-ons to an existing home insurance policy. But they’re slowly becoming more common. The Co-Operators recently made this kind of coverage available for purchase to Quebec and Manitoba consumers, completing its cross-country roll-out of the product that began in 2015.
The study says average flood damage costs for impacted homeowners in the Greater Toronto Area is estimated at $43,000. That’s according to IBC estimates based on flooding in Toronto in 2013.
Flooding isn’t just a financial concern, either. It has negative impacts on mental health, too. The University of Waterloo study references a separate study from 2017 of 200 flood-affected households in Montreal that found “almost 70% of respondents reported having suffered from anxiety, sleep disturbances or concentration problems since the floods.”
"Homeowners can do a lot themselves to reduce risk of flooding," study coauthor Natalia Moudrak told the Canadian Press. Researchers recommended some inexpensive ways to keep homes dry, including keeping rain spouts far enough away or installing a sump pump with a backup power supply.