Insurance premiums set to climb amid growing trend of severe weather
Insurance premiums set to climb amid growing trend of severe weather | Insurance Business Canada
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Insurance premiums set to climb amid growing trend of severe weather
Insurance bureau director highlights spike in insured losses
The Insurance Bureau of Canada (IBC) has warned that more frequent storms are likely to drive up insurance premiums as one Ottawa suburb recovers from the impact of a tornado that touched down in the area last week.
The tornado that struck Barrhaven on Thursday caused damage to an estimated 125 homes, with reports of shattered windows, roofs and shingles being ripped off, as well as toppled trees.
The incident is the latest in an onslaught of severe weather experienced by Ottawa in recent years, ranging from the derecho of last year to six tornadoes in 2018.
“These natural disasters are becoming bigger and more expensive in terms of insured losses,” Anne Marie Thomas, IBC’s director of consumer and industry relations, told CBC News. “Claims are increasing. Claims costs are increasing. And it just makes sense that that could translate into higher premiums.”
The average annual losses from natural disasters in Canada amounted to approximately $675 million between 2001 and 2010, according to IBC. The subsequent decade saw these losses spike to an average of $2 billion, with last year’s calamities pushing costs to $3.1 billion.
Thomas said that while no single weather event might directly cause premium increases for a specific area, supplementary factors such as inflation, disruptions in supply chains, and labour shortages can also contribute to the hike.
It’s not just Ottawa facing these challenges either, she said, as the country continues to face wildfires and hurricanes that have increased in intensity.
Addressing concerns about specific coverage, Thomas noted that tornadoes are generally covered as wind damage under most policies. This includes flying debris and fallen tree branches.
“It would also cover a loss to your home and contents from water entering your home because something flew into your roof, or a tree fell on your house,” she said.
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