Climate Change: Is Your Home Well Insured?

Hurricane Fiona in the Atlantic, hurricanes and thunderstorms (derechos) in Quebec and Ontario, and several other extreme weather events across the country made 2022 the third-worst year for insurance claims and claims, according to the Insurance Bureau of Canada (IBC).

Over 50,000 claims have been filed in Alberta due to high winds. According to the Canadian Institute of Actuaries (CIA), wildfire damage in British Columbia could run into the billions of dollars over the past two years.

Quebec is fine too. According to the Insurance Bureau of Canada (IBC), our part of the country has experienced seven devastating weather events in the last ten years, totaling $561 million.

There is no doubt that climate change will continue to affect our properties… and our insurance premiums: since the 1980s, the compensation paid by insurers for damage caused by extreme weather has doubled every 5 to 10 years.

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water, wind, fire

Of all the causes of climate change-related disasters, water ranks first. In 2021, flood, infiltration and backflow claims accounted for almost half of the cases and more than a third of compensations.

Rainfall in Quebec increased by an average of 11% between 1948 and 2016, faster than the rest of the country, according to the Ouranos scientific consortium. The municipal infrastructure can hardly accommodate these millions of cubic meters of water entering the pipes.

This stream of damage is added to the series of damage caused by other climatic events. Strong winds damage roofs, smash windows, knock down trees and destroy fences. Wildfires destroy all property and cause significant collateral damage with smoke and soot.

In fact, existing buildings and new builds are not well suited to deal with the impact of these changes, according to Line Crevier, who is in charge of technical affairs at BAC. The organization advocates revising building standards to make buildings more weather-resistant, such as by using stronger roof materials or improving ground drainage.

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Your insurance and water damage from a climate event

One of the first reflexes to take is to carefully read your policies to find out if you are well protected from the climate risks that affect your area. Some of these risks may be taken into account when concluding an insurance contract. Make sure you have approvals that protect you.

Basic home insurance covers water damage related to installations inside the home, such as a leaky faucet or a broken water heater.

For damage caused by water seeping through the ground or the roof of a house, additional protection must be purchased. The Groundwater and Sewerage Certificate will protect you in the event of groundwater or surface water seepage, sewer backwater or overflow, or groundwater swell. The “Water Above Ground” approval covers damage caused by ingress of rain or snow, or if gutters overflow.

For more information on water damage covered by basic protection and various approvals, visit this page on the Info Assurance website.

If your home is near a stream or lake, you may have insurance issues, Line Crevier says. In the event of a claim, you will have to contact the Quebec government, which has a compensation program for landlords and tenants.

Fires and strong winds: what protection?

Coverage for damage caused by strong winds (thunderstorms, hurricanes, tornadoes) and forest fires depends on the insurer.

• Home structural damage coverage usually covers the cost of repairing or replacing the home structure, as well as cleaning and garbage disposal costs.
• Personal property insurance can help replace furniture, clothing, and appliances damaged by a natural disaster.
• Liability covers legal fees and settlement fees, for example, if shingles come off your roof and damage your neighbor’s car.

You should pay particular attention to these clauses in your contract to ensure that they cover a sufficient amount in the event of a claim.

Mistakes to Avoid

According to Lisa Crevier, when entering into a loan agreement, you may be tempted to choose the cheapest premium. However, depriving yourself of endorsements that cover certain risks associated with climatic events, in particular water infiltration, is a bad calculation, since they can entail significant costs in the event of a claim.

To determine the maximum amount of damage that should be insured against, IBC recommends establishing a list of inventory items that will have to be replaced in the event of a claim. The organization offers an online tool for compiling this inventory.

Finally, you should also consider the cost of staying in a hotel or renting an apartment while renovating your home. Once all of these amounts are established, you will have a clearer idea of ​​the amount you will have to insure.

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