Federal government remains non-committal on creating flood insurance program for high-risk homeowners
Published: November 17, 2017
Updated: July 24, 2018
Author: Luke Jones
CATEGORY: Home Insurance
The insurance industry has repeatedly called for the federal government to support customers by supplying flood risk insurance to high-risk residential homes. However, no commitment has arrived from the public sector, but this week government representatives remained vague on the possibility to such coverage.
Insurance companies feel they have already done their part. Overland flood coverage was introduced in 2015 by several carriers and has been adopted by more since. While it is still a nascent market, policies have diversified.
However, to truly deal with the severity of flood risk in Canada, the private sector believes government intervention is necessary.
Hundreds of thousands of Canadian homes are built in flood risk areas, and many of them are on what are classed as high-risk zones. The insurance losses from flooding can be catastrophic and home insurance customers may need further help from the federal government.
Canadian Underwriter spoke to Public Safety Canada during round table discussion in Regina on Thursday and asked whether the government will create a residential flood policy for high risk homeowners who cannot afford coverage through private channels. Both the United States and United Kingdom have such projects in place, but Public Safety Canada was non-committal regarding federal government pursuing a similar program.
When asked, a representative said government is “discussing the requirements for developing a sustainable financial management system for flood risk.”
The round table Thursday was hosted by Ralph Goodale, Canada’s public safety and emergency preparedness minister, and Saskatchewan government relations minister Larry Doke. Insurance Bureau of Canada and Insurance Brokers Association of Canada officials are also participating in the event.
The “goal is to launch a formalized national dialogue on flood risk, and discuss what steps can be taken to address this challenge,” a Public Safety Canada spokesperson stated Thursday an email to Canadian Underwriter.
“In the event of a large-scale natural disaster, the Government of Canada provides financial assistance to provincial and territorial governments (PTs) through the Disaster Financial Assistance Arrangements (DFAA), administered by Public Safety Canada,” she concluded.