CALGARY- It’s official: the June floods have been declared the costliest natural disaster in Canadian history—and chances are, you’ll be paying for it.
Damage is estimated at $1.7 billion, and continues to rise as more claims are made.
As a result, many homeowners have seen their home insurance premiums skyrocket—whether or not they live in a flood zone.
“People just have to make decisions, some of that is to have less insurance, have no insurance,” says seniors advocate Luanne Whitmarsh from the Kerby Centre. “It’s fine and well to hear you could flood-proof your home, but where are people supposed to get the money for that? Low income folks don’t have that kind of funds.”
Some homeowners have already reported seeing 40 per cent increases, even though their homes were not anywhere near the flood. The amount varies by insurance provider, how much exposure that company had, claims history and location.
Experts say putting the cost on homeowners is not an ideal solution.
“At some point, you reach a threshold where people say ‘I can’t afford that anymore’ and then you have another serious issue because people are going without insurance,” says Bill Adams from the Insurance Bureau of Canada.
He wants that unless changes are made, insurance coverage will not be sustainable in the future. Possible solutions could come in the form of better construction materials, or limits on what is covered in a home.
“Perhaps there won’t be as widespread availability of certain types of coverages, or there might be deductibles. There are different ways insurers can respond to this, to continue to make insurance broadly available.”
Flood-related home insurance increases will likely start showing up early next year on renewals, if they haven’t already.