By: Luke Jones, Published on July 31, 2017 05:29 PM, Last Update on July 31, 2017 02:31 PM
Property owners in Western Canada face and increase in home insurance premiums, according to an industry expert. Increased climate conditions such as floods and wildfires means homeowners will see another rise in how much they pay to protect property.
Insurers calculating the cost of home protection look at a region (by municipality and province) and study patterns to determine how much the coverage should cost.
British Columbia and Alberta have been hard hit by floods and wildfires over recent years, and 2017 has already seen major events. Insurance companies will see activity as a trend and will adjust premiums accordingly to offset the risk.
"No single event can be attributed to climate change, but the fact we're having increased severe weather events across Canada fits with the predictive model — the probability of future events is now higher," said Craig Stewart, vice president of federal affairs.
"You can expect that rates will start to rise."
When small and big environmental disasters strike, it is insurance companies who ultimately foot the bill. Cat events cost the industry billions of dollars each year. For example, last May’s Fort McMurray wildfire cost the industry nearly $4 billion alone.
To manage rising claims and increased risk of cat events, insurance companies will almost certainly raise rates.
"If you're living in tinder-dry forested area, you could be taking better measures to protect yourself — from the shingles on your roof to not stacking firewood near your house," Stewart said.
"We need to go a much better job of raising awareness and then providing incentives [for preparedness] ... and we need better coordination between our agencies and the governments for that."