Every year, extreme weather events hit Québec and Canada. Whether it is violent winds and tornadoes, torrential rain, ice, hail or forest fires, these disasters cause significant financial losses and material damage.

Wildfires and insurance

Wildfire episodes are becoming more numerous and frequent across the country. Find out more about this issue and the different stages of the claims procedure.

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Property and casualty insurers are very concerned by climate change and extreme weather phenomena, because as soon as such an event occurs, they are there to respond to the insured and victims and assist them with the claim settlement.

For many years, IBC advocates for adapting and using risk attenuation measures to make Québec’s cities and regions more resilient to climate change.

IBC has also done research and is working on solutions to help Canadians and Quebecers protect themselves from the devastating effects of these events.

Natural catastrophes on the rise

Over the past 30 years, the frequency of natural disasters and their cost has continued to increase, a worldwide trend, which Québec and Canada have not escaped.

This increase has major impacts for Quebecers, especially since it:

  • Threats the assets and financial security of citizens and businesses
  • Damages vulnerable infrastructure and greatly affects natural resources
  • Becomes a tax and financial burden for governments and municipalities (restoration costs)
  • Has a significant social and economic impact for the areas and populations strongly affected by these events.

For more than 10 years, yearly insured losses caused by natural disasters in Canada have totalled $1 billion or more. Over the past five years, the average is $2.2 billion per year:

In Québec, the trend has been similar over the past decade, with the cost of insured catastrophic claims averaging more than$200 million per year for the past five years.

Home insurance and disasters

Whether you are an owner, co-owner or tenant, your home insurance basic policy covers most events, sometimes referred to as “Acts of God”.

The basic home insurance policy covers violent winds, tornadoes, hail and forest fires, but not landslides. Damage caused by water (such as sewer back-up, infiltration or overflow of a body of water) or an earthquake are generally insured by adding an endorsement.

To find out more tips, check with your insurance representative.

Measures to prevent damage

Although it is possible to insure against these risks, it is essential to act to limit the damage. Different prevention measures can make all the difference:

  • Inspect and maintain your home
  • Find out about the measures to be taken from your municipality, for example in the event of a flood alert
  • Visit infoinsurance.ca and “Prevention tips” blogs for more advice

You may also be entitled to reimbursement of living expenses if you have to evacuate your home.

Insurance contributes to recovery

Research worldwide shows that where insurance subscription is high, natural disasters have a lesser impact1.

While insurers compensate businesses and individuals, governments are able to focus on their main activity: urgent interventions, financial support to low-income households and restoration of public infrastructure.

1 Source: Optimising Disaster Recovery: The Role of Insurance Capital in Improving Economic Resilience, Cambridge Centre for Risk Studies and AXA XL, 2020

IBC’S approach to climate change

L’approche du BAC et des assureurs de dommages face aux changements climatiques vise à favoriser des actions concertées entre les intervenants clés (scientifiques, gouvernements, services d’urgence, banques, assureurs, organismes et citoyens):

  • Sensibiliser et conscientiser les villes et les citoyens aux risques et sur les mesures à prendre pour augmenter leur sécurité;
  • Investir de manière ciblée dans des mesures d’adaptation telles que des infrastructures naturelles et une gestion intégrée de l’eau;
  • Renforcer les normes de construction pour résister à la pression du vent, au poids de la neige et aux grandes quantités d’eau dans un court laps de temps;
  • Mettre en place des incitatifs pour encourager la résilience des individus et des communautés.

Shared roles and responsabilities

Governments and the insurance industry have shared roles and responsibilities in climate loss prevention and restoration:

Governments can:

  • Establish a balanced framework to allow insurers to adapt to a constantly shifting market and the changing needs of consumers and businesses.
  • Implement climate change adaptation and prevention programs and policies
  • Provide financial assistance to high-risk regions and low-income individuals.

The expertise of insurers and reinsurers allows them to:

  • Develop better management of climate risks: factoring in the scientific knowledge behind each risk to quantifying the underlying physical and financial impact.
  • Transfer the risks related to natural disasters from taxpayers to global financial markets economically and effectively (reinsurance).

Continuous actions

IBC undertakes continuous actions to raise public awareness of extreme weather events:

  • Awareness campaigns about extreme weather events on various platforms
  • Media relations and media releases to support disaster victims during crises (ice, floods, tornadoes)
  • Support and coordination among insurers, the authorities and policyholders regarding claims settlement for losses during disasters
  • Organizing conferences and workshops
  • Publishing studies