Severe flood would leave Canadian taxpayers on the hook for billions in damage: report

A new report says Canada is the only G7 nation thatleaves unprepared homeowners on the hook financially for losses fromsevere flooding.

The study, released by Swiss Re Canada, said floods have made uphalf of Canada's natural disasters since 1970. The internationalwholesale insurance provider said flooding is expected to remain amajor concern as such disasters become more frequent.

• IN-DEPTH COVERAGE | Alberta Floods 2013
• Insurance Bureau CEO calls for national disaster strategy

Christoph Oehy, of Swiss Re Canada, said residential homes inCanada are either totally vulnerable or only marginally protectedfrom flooding losses. While insurance can be purchased for somewater-related perils in Canada, comprehensive residential floodpolicies were not available until recently.

The way things are right now, Oehy said homeowners and governmentend up paying the majority of flood-related damage. It leaves manyfamilies without the necessary funds to rebuild their lives anddelays economic recovery in the affected areas.

"We believe traditionally about 40 per cent of the flood riskeach year is insured and about 60 per cent of the flood risk isuninsured," he said.

The report comes just days before the third anniversary of the2013 southern Alberta floods, which forced 100,000 people from theirhomes, primarily in Calgary and High River, and caused an estimated$6 billion in damage.

The high water damaged 14,000 homes, 80 schools and 10 healthfacilities and forced the closure of nearly 1,000 kilometres ofhighway.

Calgary Mayor Naheed Nenshi, reacting to the report, agreed that the lack of flood insurance is a problem for many.

"It isvery true that we have not yet solved the insurance issue in Canada on overland flooding,though a number of insurance companies are now offering overland flood insurance, which was never offered before," he said.

Nenshi advised Calgarians to check their insurance policies for overland flood coverageand to be ready for an emergency by having a 72-hour emergency kit prepared.

Comprehensive flood insurance lacking

The report said insurance covered only about one-third of theeconomic losses suffered as a result of the Alberta floods and about$1 billion of the almost $1.5 billion in total losses from a floodthat submerged roads, railways and basements in Toronto a few weekslater that same year.

• Calgary gets $13M in fresh flood funding
• Brian Mason fires back at Springbank landowners group about dry dam

Swiss Re used a flood model to calculate the cost ofone-in-200-year flood disasters province-by-province. The report
estimates a major disaster in Ontario could cost $6.4 billion indamages but only $2.5 billion would be covered. In Alberta, theprojection would be $4.3 billion while only $1.8 billion would beinsured.

Widespread flood insurance may not be far off but Oehy said itrequires the co-operation of government, the insurance industry andhomeowners. Four years ago, Oehy said there were questions about howto assess the risks without flood zones or models.

"That has definitely changed a lot and the flood in 2013 hascertainly provided a lot of momentum to really get that work done."

• MORE NEWS |'He's just sentenced Alex to death,' Radita family's former social worker says of B.C. judge
• MORE NEWS |'I'm truly sad:' Calgary gay barordered to remove pride flag after Orlando shooting