Most Canadians lack flood insurance

TORONTO • The majority of Canadian homeowners aren’t insured for flooding and could be left footing at least part of the bill after heavy rains in several areas across the country, experts say.

Craig Stewart, vice- president of federal affairs for the Insurance Bureau of Canada, estimates that only 10 to 15 per cent of Canadians have so-called “overland flood insurance,” which is offered as an add-on to policies.

Stewart said that’s because it’s a fairly new product that wasn’t available prior to 2013, when severe flooding hit Toronto and Alberta.

Heavy rains left several communities in Quebec and Ontario struggling with rising flood waters over the weekend, while parts of New Brunswick and British Columbia also faced flooding.

Insurers started working on the overland flood insurance add- on after the 2013 incidents, but it took time to roll the policies out. Stewart says the product has been available since late 2015.

The low uptake is likely due to the fact that most Canadians only interact with their insurance broker when the time comes to renew their policy, Stewart said.

“Most people are not aware that overland flood insurance is available,” Stewart said. “Therefore, unless they have been directly in a conversation with their broker or their agent at the time of renewal over the past year, they likely won’t have it.”

Stewart said most homeowners grappling with flood damage will be left relying on government assistance, which typically covers less than insurance.

Jason Thistlethwaite, an assistant professor in the faculty of environment at the University of Waterloo, said many Canadians lack the information they need about flood risk. For example, many Canadians think fire poses the biggest threat to their homes, when in fact flood damage is more common, Thistlethwaite said.

Thistlethwaite co- authored a study last year that surveyed 2,300 Canadians who live in high- risk flood areas. The majority of those polled — 70 per cent — said they had not been contacted by an insurance company about newly available overland flood insurance.

Thistlethwaite said governments should do more to help homeowners get the information they need to protect themselves.

“We’re just looking at the tip of the iceberg when it comes to flooding because climate change is going to make the problem much worse in the future,” he said.