Against that backdrop, governments and industry players in Canada are racing to find solutions to ensure home insurance does not become a luxury for the rich.In one startling global example, insurance giants State Farm and Allstate said in the past year that they the would stop issuing new home insurance policies across the entire U.S. state of California, citing increasing wildfire risk.
Alvarez published a report for DBRS Morningstar last month on wildfires in Canada, predicting insurers will “come under pressure” from an “above-average wildfire season” in 2023 but most will be able to handle the losses. Damages will likely be lower than the record $4.3 billion from the 2016 wildfires that hit the Alberta oil town of Fort McMurray, the report said.
Matt Hands, vice-president of insurance at Ratehub.ca, said Canada’s insurance industry is in the early stages of responding to climate change and weather impacts, but overall the situation isn’t as “dire” as in the U.S. because wildfires are still considered unpredictable in Canada, even as they occur more frequently.
He recommended that people shop around to assess all their options when looking for home insurance, and talk to a broker to ensure their bases are covered. He also advised people make sure replacement costs for their home are up-to-date in their insurance plans, as building materials have become more expensive over time and could mean a costly rebuild in the event of extreme weather damage.Weather-related damages caused $3.
For example, many Atlantic Canadians whose homes were battered by post-tropical storm Fiona last year were not able to claim insurance for their losses, and some affected by 2021 floods in British Columbia similarly found themselves without coverage.