Sept. 22, 2022 — PUBLIC Safety Canada has released its highly anticipated report that will serve as a blueprint for a national flood insurance program.

The report, titled ‘Adapting to Rising Flood Risk: An Analysis of Insurance Solutions for Canada,’ was developed over nearly two years by an interdisciplinary task force on flood insurance and relocation.

The report is designed to support decision-making for creating a national flood insurance program, with special considerations for potential strategic relocation of those at most risk.

It was developed as part of federal government efforts to develop a National Adaptation Strategy, which is set to launch by the end of 2022.

Strengthening Canada’s resilience to flooding and other disasters is one of the five focus areas of the strategy.

“The insurance industry is on the front lines, addressing the financial risk of climate change,” said Craig Stewart, VP, climate change and federal issues at the Insurance Bureau of Canada and co-chair of disaster resilience and the security advisory table for the National Adaptation Strategy.

“Insurance claims from intensifying severe weather have more than quadrupled over the past 15 years. Flooding is the most widespread climate peril facing Canadians today and those at high risk cannot be affordably insured.”

Mr. Stewart said insurers are eager to support the formation of a national flood insurance program that is built around a public-private partnership model and are looking forward to helping translate the research into a program that makes coverage available to high risk Canadians.

The report outlines key findings into Canada’s flood risk landscape and how to reduce the risk and costs of flooding.

It estimates total residential flood risk in Canada to be roughly $2.9bn per year.

The figure is significantly higher than previous estimates, includes the effects of larger ‘tail risk’ events and reflects more accurate estimations of a number of residences and predicted damages.

The task force noted that the vast majority of risk is concentrated in a small number of the highest risk homes.

It said that of the estimated $2.9bn of total risk, 89.3% is concentrated in the top 10% of the highest-risk homes.

And 34.1% of the risk is concentrated in the top 1% of those at the highest risk.

The researchers said some standardization is needed in the market.

They said moving towards clear and standardized language in flood insurance would reduce confusion about coverage and allow for a more informed choice for homeowners.

And they said making flood coverage more comprehensive and seamless through bundling of insurance products would likely streamline the claim process, improving both financial and mental health outcomes post-flood.

(Coverage of the national flood insurance blueprint continues below and more details were presented in Thompson’s Sept. 12 weekly edition. Email mpub@rogers.com for more information).