Flood insurance not available to many who’ve lost everything

Talks are ongoing between the provincial government and the insurance industry following weeks of atmospheric rivers that have annihilated some parts of B.C. and it comes as many homeowners and farmers face the reality they’re not covered based on where they live.

Flood insurance is not an option in this province for people who live in so-called high-risk areas.

“The industry mapped significant portions of our provincial waterways to better understand the likelihood of flooding,” explains Aaron Sutherland, vice-president Pacific and Western for the Insurance Bureau of Canada. “They’ve also layered in the latest climate data that predicts how that’s increasing moving forward. So, we know about five per cent of British Columbian homeowners are living in an area of too high a risk for the insurance industry to be able to provide them coverage for flood.”

Related Article: Nearly 1,500 ICBC claims filed related to extreme weather

Sutherland admits this is “challenging” for people who will need to rely on the government’s financial assistance in these events.

“If your home can be expected to flood every 10-15 years and let’s just assume that costs $100,000 in damage, the industry will have to charge you $10,000 a year just to break even on that and that’s not an affordable product for anybody, so typically, it’s not offered.”

As people tally the bills of trying to rebuild their lives, they’re also absorbing the fact any money from the province or organizations like the Red Cross, simply won’t be enough.

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• How to help British Columbians impacted by floods, mudslides

• B.C. breaking temperature records, causing snowmelt, adding to flooding

Sutherland admits with climate change increasingly taking its toll on everyone, but especially here in B.C. where we’ve dealt with a deadly heat dome, horrifying wildfires, a tornado watch and now historic floods, time is of the essence to change policies.

“Flood insurance for your home is a separate product from your standard home insurance policy. Since 2015, about half of British Columbians have added it, which is a good thing, but the challenge is that in areas of highest risk where the insurance industry expects your home to flood quite frequently, the availability of flood insurance for your home is quite limited. I think that’s the reality we’re going to see in places like Abbotsford, Sumas and Merritt, where a significant number of homeowners who’ve been impacted, simply couldn’t purchase flood insurance for their home in advance.”

As homeowners slowly rebuild, we’re learning most don’t have flood insurance because it’s not offered in high-risk areas of BC. The @InsuranceBureau says they’ll have to rely on provincial funding, donations, and money from the Canadian Red Cross. Details on @CityNewsVAN. https://t.co/jfzKDalSXZ

— Sonia Aslam (@SoniaSAslam) December 2, 2021

He hopes by next year, that changes at both a provincial and federal level.

“These are public/private partnerships that exist in other nations, particularly in many European nations, and it’s something we should be bringing to Canada to make sure everyone can access financial protection for their home for floods going forward. It’s going to require a really holistic approach, insurance is just one piece of that. If we want to make any insurance product sustainable, we have to address the risk and unfortunately, the risk is very real in these areas as we’re seeing today.”

The federal government has said flooding causes more than $1.5 billion in damage to homes every year, yet an insurance option for that is still not available.

“That’s the hope that we don’t treat this as a one-off, that we learn from this. We recognize the trend and with our changing climate, the frequency and severity of extreme weather events of which floods are certainly one, are only going to increase going forward. We must re-double our efforts to protect these communities going forward. Insurance is part of that, but the only way to make flood insurance affordable and available to everyone is to address the risk itself and the unfortunate reality is that a lot of the areas we’re seeing impacted today, the risk is so high that the insurance industry cannot create an affordable product,” says Sutherland.

The IBC has people on the ground to help those who are trying to figure out their next steps. The bureau won’t speculate on how much the floods will cost and won’t know the payout costs until mid-month, at the earliest.

A reminder, the federal and provincial governments are matching all donations to the Red Cross when it comes to flood relief, meaning if you give $1 it will turn into $3.