Storm surge is another big under-insured risk, said Nadja Dreff, senior vice-president and head of Canadian insurance also at DBRS Morningstar. The Atlantic is at particularly high risk of storm surge, which tends to be in the aftermath of hurricanes or other such storms, said Adesanya.“There is very much a need for this coverage. And yet, we still haven’t gotten to that level where we can say the insurance sector completely is able to cover all the risks,” she said.
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. Right now, around 80 per cent of Cooperators’ clients are covered for storm surge, but there’s lower uptake in higher-risk areas, said Laidlaw. For example, she said only 60 per cent of Cooperators’ clients in Atlantic Canada are covered for storm surge.
“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.