OTTAWA — A new report co-authored by the government and the insurance industry says Canada can do a better job of protecting homeowners from the escalating financial risks of flooding.
The report, produced by a national working group co-chaired by the Insurance Bureau of Canada and Public Safety Canada, says the worsening threat means the country has to change how it covers the resulting cost of such disasters.
The report estimates about one-fifth of homes in Canada are at risk of overland flooding, while insurance payouts have surged to about $1 billion per year over the past six years.
The working group offered three possible options: a pure market approach where risk is borne by homeowners; one in which government is more heavily involved, and the creation of a high-risk pool of funds to help manage the financial risk.
All three options are viable, the report says, though some do a better job than others at meeting core principles like affordability, efficiency and financial sustainability.
The report also explores the importance of creating more public awareness and encouraging homeowners to take steps to limit their risk, or to take even more drastic steps, like moving.