Flooding is Canada’s most common and expensive natural disaster, causing approximately $1.5 billion annually in damages to homes and infrastructure. According to the Insurance Bureau of Canada (IBC), about 10% of the country’s residential properties face flood risks. Eighty percent of cities have neighbourhoods situated on flood plains. Despite the growing prevalence of flooding, the number of people signing up for optional flood insurance remains low. Insurers have offered overland flood insurance since 2015, shortly after the disastrous 2013 flood in southern Alberta. 2013 remains Canada’s second most expensive year for natural disasters, with $3.87 billion going to insurance payouts for the Alberta floods, the Greater Toronto Area floods, and the Toronto ice storm. The most expensive year was 2016 due to the Fort McMurray wildfire, with the insurance industry paying out $5.96 billion in claims.
National flood insurance program on its way
After many consultations and a long waiting period, Blacklock’s Reporter reports that a national flood insurance program is slated to launch within the next 18 months, as announced by the Department of Public Safety. Homeowners in flood-prone areas may face annual premiums of up to $900 under this plan. Those who opt out of coverage risk being deemed ineligible for disaster relief in the event of a flood.
Mandatory coverage for high-risk properties
The federal government’s Task Force on Flood Insurance and Relocation has put forward several recommendations, including mandatory coverage for properties in high-risk areas. Proposed annual premiums may range between $700 and $900, with a $5,000 deductible and a maximum payout of $300,000. The Task Force’s report, “Adapting to Rising Flood Risk: An Analysis of Insurance Solutions for Canada,” highlights the need for such measures, citing the substantial public costs incurred for recovery and rebuilding after floods. These expenses are often taken on primarily by federal and provincial governments, which absorb up to 90% of these costs.
The report also criticized local governments and developers for contributing to flood risks through dubious land-use decisions. While such developments generate higher property values and increased tax revenues, they leave communities more vulnerable to flooding.
The national flood insurance program is being developed by the Canada Mortgage and Housing Corporation, with a target implementation date of 2025. Provincial regulators, academic experts, and other stakeholders have been collaborating to finalize the program’s details. The goal is to ensure long-term financial sustainability through cost-sharing initiatives and enhanced risk mitigation efforts.
Understanding your flood risk: Resources for Albertans
For Albertans, knowing whether they live in a flood plain is crucial for managing flood risk. The Alberta Floods Portal is a valuable tool for identifying the likelihood of a flood in your area and whether your property is located in a fringe, floodway, or hazard area. For example, in Calgary, areas near the Elbow and Bow Rivers are particularly prone to flooding. Land near the Elbow River, upstream of the Glenmore Reservoir, faces a staggering 95.8% chance of flooding within the next 30 years.
Fortunately, significant upgrades to the Glenmore Reservoir dam have improved its resilience against flooding. The installation of 21 steel gates has enhanced the dam’s capacity to hold back water, increasing the reservoir’s storage by approximately 10 million cubic meters. These improvements aim to protect Calgarians from future events similar to the devastating floods of 2013.
The importance of overland flood insurance
Homeowners are urged to take proactive steps in understanding their risks and securing appropriate insurance coverage. Overland flood insurance offers vital protection for homeowners. Unfortunately, it was not available during the 2013 floods, leaving many to cover substantial repair costs for basement and foundation damage caused by water coming in through windows and doors.
Today, most major insurance providers offer flood insurance either as part of an enhanced water damage endorsement or as a stand-alone addition to home insurance policies. It is equally essential to carry sewer back-up coverage, which protects against damages caused by overwhelmed municipal sewer systems. Homeowners are also encouraged to install backflow valves to prevent water from entering their homes via sewer lines. Additionally, subsidies may be available for installing sump pumps or other approved mitigation devices — policyholders should inquire with their insurance brokers about these options.
Supporting Albertans with comprehensive insurance solutions
Homeowners looking for tailored home insurance coverage can turn to us at Lane’s Insurance. We are a locally owned brokerage specializing in providing advanced claims support, personalized customer service, and access to a wide array of insurance products. With offices in Calgary, Banff, Edmonton, and across Alberta, Lane’s works for your rather than the insurance companies and will work hard to find you the very best coverage at the very best price.
