In comparison, as wildfires in Alberta have forced evacuations and filled the skies with smoke, the Insurance Bureau of Canada said standard homeowner’s insurance covers fire damage as well as the costs of mass evacuations.Storm surge is another big under-insured risk, said Nadja Dreff, senior vice-president and head of Canadian insurance also at DBRS Morningstar.
But some of the biggest damage can come from these kinds of events, as illustrated by hurricane Fiona, which hit homes in Atlantic Canada last fall. According to the IBC, severe weather caused $3.1 billion in insured damage in Canada in 2022, with Fiona costing $800 million. That might seem counter-intuitive, but it’s likely because insurance premiums are based on risk, said Laidlaw.Laidlaw said it’s possible there will be an uptick in interest among higher-risk homeowners as they rebuild from Fiona’s damage, but that hasn’t happened yet.
“They’re trying to fill a gap that’s existed for a while now,” said Adesanya, though it’s not yet clear what form the program will take.There are programs in other countries that give insight into what kinds of models are possible, said Adesanya. For example, the U.S. national flood insurance program is government-driven, while in the U.K. it’s industry-driven, with risk shared across insurance companies, he said.