Insurance companies in Canada have been offering overland flood insurance since 2015. However, companies say they need a government-backed coverage to help cover costs of basement flooding. Eventually, such a program would be able to aid consumers affected by coastal floods.
Insurance companies are not offering coverage for homes already known to be high-risk for flood. Government backed flood insurance products have been successful in other markets, such as the U.K.
Canadian authorities have not committed to a similar program. In the debate, the government has been tackling ways in which it can manage the costs of claims. Perhaps the solution lies in big industry.
Money needed to pay homeowners affected by basement flooding could come from suing large oil firm, one politician believes.
“A lot of people are not going to be able to qualify for private insurance against flooding in the future,” warned Peter Tabuns, an Ontario member of provincial parliament said in the legislature. The average cost of repairing a property following a basement flood is $43,000, according to the Intact Centre on Climate Adaptation.
While insurers are covering homeowners, the high-risk customers are left without a protection. There is a clear flood insurance gap in Canada. Hundreds of thousands of homeowners are in properties deemed to high-risk to protect at an affordable price.
Earlier this month, Tabuns tabled Bill 37. The legislation would allow governments, companies, and consumers to sue fossil fuel organizations in Ontario. While the bill is not specifically for flood insurance, it would put the fault of climate change on fossil fuel giants. Increased flood frequency and severity has been caused by man-made environmental impacts.
“When thousands of people’s basements fill up with sewage for the third time in a row after a major storm has overwhelmed the sewer system, who is going to pay?” asked Tabuns. “When people who are already struggling to pay their bills are hauling out waterlogged couches and other furniture to put on the front lawn, who is going to pay to help replace that furniture?
“If Toronto or Windsor or Hamilton has to rebuild its storm sewer systems to deal with much bigger rainstorms, then the legislation allows governments to sue for those costs in order to prevent future risk to life and property,” Tabuns said.
It is worth noting the private member’s bill is likely to be squashed. Government MPPs continued to criticize Bill 37 during a second reading this week. Most opposers say fossil fuel companies will simply leave Ontario if the bill is passed.