By: Luke Jones, Published on May 29, 2017 05:04 PM, Last Update on May 29, 2017 02:06 PM
The Insurance Bureau of Canada (IBC) has issued information that shows water damage has surpassed fire as the main reason for home insurance claims in Canada.
Because of this, the bureau is following others in calling for a national flood mitigation program to help deal with a growing problem.
Speaking to the Ottawa Sun, IBC director of consumer and industry relations, Pete Katageorgos, said “water is the new fire”.
“Insurers are paying out more with regards to water damage claims than fire damage — even though home insurance really started out as a fire protection policy.”
To back up its claim, the IBC cites data that shows since 2009, Canadian insurance companies are averaging $400 million per year to pay out claims from severe weather events. Most of these events involves flooding. To highlight how flooding has become a big problem, the Bureau says that in the 25 years before 2009, the industry average for severe weather events was $100 million per year.
“It has gone up four-fold, and there’s no reason to believe it will go down,” Karageorgos pointed out.
While the federal government’s Disaster Financial Assistance Arrangements program covers homeowners against flood damage, the fund is consistently being stretched.
Although the federal government helps pay for flood damage through the Disaster Financial Assistance Arrangements program, the program continues to pay for mounting costs. In its report, the IBC says the government will end up paying $673 million per year within the next five years.