Climate change continues to cost Canadian taxpayers and insurance companies, with 2019 seeing $1.3 billion in insured damage as a result of extreme weather such as floods, rain, snow and windstorms, according to Catastrophe Indices and Quantification Inc.
This makes 2019 the seventh-most expensive year on record.
Unlike in 2016, when the FortMcMurray wildfire alone cost the industry $5.2 billion, there was no single catastrophic weather event that accounted for the $1.3 billion in damage last year. Instead, there were multiple smaller severe weather events that happened from coast to coast.
It’s worth noting, however, that the last three years (2016 through 2019) are among the top-10 highest loss years on record.
“As the financial cost of severe weather rises, Insurance Bureau of Canada (IBC) is advocating for all orders of government to increase their investments in mitigating the impact of extreme weather and in building resilience against the damaging effects of extreme weather events,” IBC said in a release.
Climate change remains one of the biggest threats to the insurance industry, with many homes becoming uninsurable due to repeated flood claims. Flooding remains Canada’s main concern, according to Blair Feltmate, head of the Intact Centre on Climate Adaptation at the University of Waterloo.
Feltmate is working to rally government officials to view climate change as a threat not only to the insurance industry, but to the mortgage market as well. If homeowners have to pay out-of-pocket for a flooded basement, for example, which costs $43,000, then defaulting on their mortgage payments becomes a real possibility.
“The cost of climate change to Canadians, their businesses and governments continues to rise,” said Craig Stewart, vice-president of federal affairs at IBC in a release.
“IBC encourages all orders of government to work together to reduce our collective climate risk, beginning with a national action plan to address flooding.”
IBC recommends investing in upgraded infrastructure that will protect communities from floods and fires. It also promotes investing in improving building codes as well as offering incentives for people to build their homes and businesses away from high-risk flood areas.
Last year, Quebec premier Francoise Legault offered homeowners living on flood plains $200,000 to relocate to a less risky part of the province, though many residents argued this was not enough, given the value of their homes.