“The more losses, the more of these events, the higher the risk and the higher insurance premiums will trend,” said Craig Stewart, vice-president of climate change and federal issues at the Insurance Bureau of Canada.
“However, the wildfire season is not yet over and there is the potential for any of the fires to intensify and further pressure Q3 2023 results, especially if the fires affect densely populated regions, economic hubs, or key infrastructure. Larger and more frequent weather-related losses will continue to pressure property insurance prices higher in the near term,” they said.
“What climate change means in the medium and longer term is more extreme. So you're going to have more heat, dryness and less rain in the system, as well as more rain and storm surges," Bakos said.As fire risks rise, insurers are increasingly looking at communities' fire defences and taking them — or a lack thereof — into consideration for premiums, said Stewart.
In the U.S., which is seeing similar trends in extreme weather, some companies are deciding that it’s just not worth the risk. Recently some major insurers stopped offering new policies in California and other states amid rising extreme weather trends. “Those incentives likely now need to be re-examined and expanded so that homeowners have a greater array of incentives to protect them and to encourage them to retrofit their homes to be more resilient to fire, flood, wind and other perils,” he said.