The damage caused by Sumas Valley flooding last year came with a $675 billion price tag for insurance companies.
Most of that total was used to cover commercial property, according to the Insurance Bureau of Canada (I小蓝视频).
Because of regular flooding in the Sumas prairie, it is often impossible for the region’s residents to get residential flood insurance. The provincial and federal governments therefore footed the bill for most of the damage recovery and repair to residential properties, a cost estimated to be in the billions.
It is too expensive to provide flood insurance in parts of the province that are prone to flooding. But waiting for disaster to strike and hoping that Ottawa or Victoria will come to the financial rescue isn’t a viable long-term resolution to the problem.
“Private industry on its own simply cannot make an affordable product for people who are living in areas that are expected to flood every five or 10 years,” said Aaron Sutherland, I小蓝视频’s Pacific vice-president. “The costs are simply too high.”
The U.K. currently operates a direct government insurer model, similar to public car insurance in 小蓝视频, where government is responsible for providing insurance coverage and collecting premiums. France has developed a private-public partnership model that involves industry and government.
Sutherland believes a private-public model maximizes what the private and public sectors have to offer. Government support would help make insurance premiums more affordable in high-risk residential areas, and insurance industry expertise could provide important risk-mitigation strategies.
“The industry has spent millions of dollars to better understand the flood risk facing this country,” said Sutherland, “and we think leveraging their experience and expertise can really help in coming up with a national solution.”
As the impacts of climate change and extreme weather events become more prevalent, Sutherland says the insurance industry needs to look at ways to proactively fight the root cause of disaster damage.
As a whole, he said the industry has been looking for “areas of offence” – focusing not only on repairing damage caused by climate change, but also on mitigating the impact the disaster-recovery process has on the environment.
The Aviva Canada Inc. insurance company has started down this path with its plan to become net-zero.
By 2040, Paul Gilbody, senior vice-president of health care and property claims, said the company used the 小蓝视频 floods as an opportunity to test and learn about handling claims in an ecological way. This included recycling wreckage and diverting over 20 tonnes of debris from landfills.
Gilbody said Aviva also wants to see the rest of the industry become more environmentally friendly by repairing houses in a way that makes them more resilient to storms and flooding, recycling material and handling debris in a way that doesn’t harm the environment.
