Weather First Changes the East Now the West

By: Daniel Rattanamahattana on September 15, 2012

Earlier this summer saw heavy weather damage in southern Ontario and Quebec due to violent winds, torrential downpours, and damaging hail that left a trail of destruction across the provinces. The end result was an increasing amount of insurance claims from this damage that insurance companies were not expecting and have said may result in higher premiums. Severe weather and hail has also been hitting out west in Alberta, and insurance providers are already hinting double digit increases in their rates may be on the way.

What started as severe rainstorms last November Alberta has seen wind and hail storms level areas from Cardston to Nanton that then moved north to Calgary and all the way up to Edmonton; these storms as well as others have accumulated over $500 million in weather related damages in the past year according to the Insurance Bureau of Canada. And the bureau says with more of this weather expected in the coming years, Albertans will need to be prepared for the increased insurance rates for coverage.

“We may have predicted an increase in these types of events, but the fact is that premiums are based on claims experience from the past”, says IBC Alberta’s director of government relations Heather Mack.

The IBC was given a study from the Institute for Catastrophic Loss Reduction. It says Alberta must adapt to these new weather patterns as it predicts a 10 percent increase in severe weather events from now through 2050 and a 20 percent increase in heavy lightning flashes that could cause massive wildfires like the one at Slave Lake that caused damages up to $700 million last year.

The report sites one of the main reasons for these changing weather patterns to be global warming. Gordon McBean director of the Loss Reduction Institute and an atmospheric scientist from Western University in Ontario says that as the air gets hotter, there will be more energy in the atmosphere which will create more hail storms, tornadoes, and heavy rain falls.

Another red flag for insurers is further development in areas that are most at risk for flooding especially in the new weather trends. IBC is lobbying the Alberta government to limit infrastructure and housing development in these areas to keep citizens and businesses from being stuck with higher rates to cover the more likely damages from flooding.

They also say homeowners are encouraged to make updates to their homes’ foundations and sewer valves in preparation for more of this weather. Heather Mack is warning citizens that while some insurers may not raise rates immediately, others who cover in high risk flooding areas may have no choice and to be prepared for these changes when renewing coverage.