The Canadian government has announced the release of the report of the Interdisciplinary Task Force on Flood Insurance and Relocation Adapting to increasing flood risk: an analysis of insurance solutions for Canada.
In Canada, floods are the most common and costly natural disaster, causing costly damage to households, property and infrastructure each year, with homeowners bearing approximately 75% of uninsured losses each year.
The report provides the evidence and information needed to support decision-making and a way forward for a national flood insurance program, with particular considerations for the potential strategic relocation of those most at risk. This is an important first step towards the common goal of reducing the impact of flooding for all Canadians and includes significant progress on flood modeling and actuarial analysis, and demonstrates adaptation to climate change. in action.
Canada is reviewing the report to guide next steps in the development of a national flood insurance program. Work is also underway on the Flood Hazard Identification and Mapping Program and a flood hazard portal to make flood hazard information more accessible to Canadians.
Along with provincial, territorial, Indigenous and municipal governments, the federal government is currently developing the country’s first National Adaptation Strategy, to help Canada be more resilient and prepare for the impacts of climate change. The National Adaptation Strategy is expected to be launched by the end of 2022. Building Canada’s resilience to floods and other disasters is one of the Strategy’s five focus areas.
“As we prepare for the increased impacts of climate change such as flooding, our government is taking proactive steps to ensure communities are better supported and protected,” said Steven Guilbeault, Minister of Environment and Change. climatic. “A national flood insurance program is a concrete example of the kind of measures that will support the implementation of the National Adaptation Strategy that will help Canadians and communities better prepare for climate change.
The report notes that the total risk of residential flooding in Canada is estimated at $2.9 billion per year, which is significantly higher than previous estimates. This amount includes the effects of larger “tail risk” events and reflects more accurate estimates of a number of residences and expected damages (based on 2020 data). The vast majority of risk is concentrated in a small number of high-risk households. Of the $2.9 billion, 89.3% is concentrated in the 10% most at-risk homes. 34.1% is concentrated in the top 1% of homes most at risk.
The task force says that some standardization is needed in the marketplace. “The move towards clear, standardized language in flood insurance reduces confusion about coverage and allows for more informed choice for homeowners,” the report says. “Making flood coverage more comprehensive and transparent through bundling flood insurance products has the potential to streamline the claims process, improving both financial and mental health outcomes after floods. In addition, ensuring that Canadians are not underinsured for their risk is an important consideration in the design of any insurance model.
And the report adds that a carefully designed flood insurance solution can provide better protection for Canadians, help share costs more widely and provide incentives for risk reduction. “Without support for socio-economically disadvantaged groups, any program where insurance is voluntary is likely to exacerbate their exclusion and marginalization,” the report continues. “For compulsory insurance models, consideration should be given to individuals and communities for whom insurance may not be an appropriate solution (e.g. due to different land/housing ownership arrangements, or for those who live In addition, targeting accessibility measures where they are most needed can be complex, and feasibility considerations must be taken into account in the design of the model.
The Working Group affirms that Indigenous peoples’ cultural connections to water and land must be respected and that increased engagement and learning with Indigenous communities, governments, organizations and individuals, including in the form of healing and sharing circles, would help ensure that initiatives are informed by Indigenous voices.
Read the full report on Public Safety Canada