National Flood Insurance Program gains momentum with federal support
National Flood Insurance Program gains momentum with federal support | Insurance Business Canada
Catastrophe & Flood
National Flood Insurance Program gains momentum with federal support
Federal housing minister backs climate-resilient housing initiatives
Catastrophe & Flood
By
Jonalyn Cueto
Canada’s Federal Minister of Housing, Infrastructure, and Communities, Sean Fraser, has expressed his support for initiatives promoting climate-resilient housing and the establishment of a National Flood Insurance Program.
Minister Fraser addressed the urgency of climate resilience at the recent Globe FORUM main stage session, where he was joined by Celyeste Power, president and CEO of the Insurance Bureau of Canada (IBC).
The session highlighted the need to build more housing supply to temper fluctuations while safeguarding existing communities from severe weather brought upon by climate change.
Power and Minister Fraser discussed the significance of adaptation strategies, including the proposed low-cost National Flood Insurance Program aimed at shielding households at the highest risk. The initiative seeks to ensure all Canadians can access affordable flood insurance, irrespective of their vulnerability to risk.
The Minister concurred with concerns raised regarding the inadequacy of current disaster assistance programs like the Disaster Financial Assistance Arrangements (DFAA), citing their exorbitant costs and sluggish response in aiding Canadians weathering the escalating frequency and intensity of climate-related disasters.
The property and casualty (P&C) insurance sector has long been sounding alarms about climate change adaptation. The calls have been propelled by a surge in weather-related insured damages, which have skyrocketed from $400 million annually in the mid-1990s to over $3 billion in recent years.
Rectifying damages incurred from severe weather
In 2023, Canada endured its fourth-worst year for weather-related insured losses, spotlighting the hefty financial toll exacted by climate shifts on taxpayers.
Most notably, an atmospheric river event in Nova Scotia unleashed over 250 millimetres of rain within 24 hours, triggering a provincial emergency and leaving behind an estimated $170 million in insured damages. Yet, due to the limited availability of overland flood insurance in high-risk zones, many affected properties remained uninsured.
Minister Fraser supported a low-cost national flood insurance program and advocated for complementary measures like flood mapping to delineate high-risk areas. He also emphasized the prudence of strategic infrastructure planning to avert future calamities.
“If you think it’s expensive to build it right, try building it twice,” he said.
Approximately 10% of Canadian households face high flood exposure without access to flood insurance.
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