Yes, that’s the staggering estimate of the cost of extreme weather across the country. Most homeowners aren’t aware of what they have coverage for and what they’re not covered.
39% believe they’re covered for overland residential flood water damage yet such flooding events are not covered.
These extreme weather events cause catastrophic level damage which is beyond the scope and financial capabilities of regular home insurance providers. It must be a national program and Canada is the only G8 country that doesn’t have national flood insurance. Fires, earthquakes, ice storms, and other perils occur as well, but overland floods are much more devastating.
The Toronto rain storm last summer cost $940 million and the recent ice storm cost $200 million.
Out in Alberta, their flood last year cost an estimated $6 Billion and Ottawa offered up $2.6 Billion to the province, although Alberta wanted $3.1 Billion. The cost of the Manitoba flood of 2011 was over $1 Billion. Weather forecasters are saying these major storms appear to be more frequent and intense. How the Federal government itself can keep coming up with funding to help with multibillion dollar disasters is unknown. The PC led federal government is trying to balance the federal budget, so this is not good timing.
If a national level emergency insurance policy is put in place, funding will have to be found for it. It has to be national solution, since funding of this scale has to be drawn from across all Canadian provinces.
Just recently Ottawa proposed a $200 million relief program. Jim Flaherty in his Federal government budget speech:
“This program will support investments in structural mitigation measures, such as infrastructure to control floods that can reduce the impact of severe natural disasters,” the government stated in its budget documents.
The government also announced it “proposes to consult with the insurance industry, provinces and territories to explore options for a national approach to residential flood insurance.”
The ultimate solution must have capacity above $200 million. Although these disasters typically hit specific regions, it would be wise for Canada as a whole to respond to them, particularly when the outcome is so negative for the economy.
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