The Ontario Broker - June 2018 - 15

But that's not a long-term solution, nor is it in the
best interest of your clients. We want to play a
leadership role, which is why we're working with
key stakeholders on adapting to and mitigating the
risks associated with climate change.

This issue is no longer a future threat, it's a present
danger. People are feeling its effects across the
province, and it's hitting the bottom lines of many
businesses and organizations.

Insurers are offering new insurance products to
Canadians to help them reduce their financial risk
from flooding. Many insurers now offer overland
flood policies along with sewer backup policies
as part of their suite of homeowner's insurance
products, and brokers are helping to explain these
new products to their clients.

rokers are well aware that the insurance
industry is on the frontlines of dealing
with extreme weather events and playing
a vital role in helping homeowners,
businesses and communities recover after
disaster strikes. You've seen first-hand how
extreme weather associated with climate change is
dramatically affecting Ontarians.

Look no further than the ice storm that struck the
province in April, bringing strong winds, flooding,
heavy snow and ice build-up. The storm resulted
in 15,000 insurance claims and cost more than
$190 million in insured damage. Coming at a time
of year when most homeowners expect to put
away the snow shovel in favour of garden tools, it
was a stark reminder that our memory of "normal"
weather is increasingly outdated.
The numbers confirm what we're all experiencing.
A generation ago, insurers across Canada paid
out, on average, about $400 million a year (in
today's dollars) on weather-related claims. Now
that number frequently tops $1 billion a year and
sometimes goes much higher. This past year in
Ontario alone, CatIQ tracked over $600 million in
insured damage from weather-related events.
Much of this cost is due to water damage. The
federal government is also seeing the impact.
Federal disaster relief spending jumped from
an average of $37 million a year in the 1970s to
$608 million a year in this decade, driven largely
by water. The Parliamentary Budget Officer
estimates that this number will reach $900 million
a year for the next five years. And 75% of that is
expected to be caused by floods alone.
All of us - individual citizens, governments and
the insurance industry - have a vested interest
in reversing this trend. Here in Canada, flood
protection should be a primary objective of any
plan to increase resilience to climate change.
Canada's insurers are working closely with
governments of all levels, advocating for a wholeof-society approach to reduce the damaging
effects of flood. This isn't just a challenge for
governments. They cannot solve it alone. All of us
have a role to play in mitigating the risk.
The easiest - and expected - response for insurers
would be to pass rising costs along to consumers.

WWW.IBAO.ORG

Canada's private insurers are investing millions
of dollars in innovative data gathering, new flood
models, machine learning and artificial intelligence
to improve their risk models.
Another critical element is education - another
place where brokers play an essential role. It's vital
consumers know what's covered and what isn't,
and that they review their policies regularly. They
also need to know what they can do to reduce their
risk. Brokers are on the frontlines ensuring these
discussions are happening.
At the beginning of May, Insurance Bureau of Canada
helped advance the wider conversation by launching
a new consumer flood education campaign that will
take place this spring and summer in communities
across Ontario, BC and Alberta. Flood Factor is an
interactive experience that aims to raise awareness
about flood risks and educate homeowners about how
they can better protect themselves and their property.
As part of the launch, we conducted a poll that
found only 37% of homeowners felt confident
about their level of knowledge about what's covered
by their home insurance policy and what isn't.
The survey yielded a host of other interesting and
concerning findings. It will come as no surprise to
brokers that only 23% of homeowners have created
an inventory of their home's contents, and 53%
have no plans to take any action to protect their
homes from flooding in the next few months.
Clearly there's an opportunity for further education
both on the home insurance product and how to
minimize the risk of loss. Everyone in the industry
should take up this challenge and continue to
find innovative and proactive ways to help arm
consumers with essential information.
I invite you to check out floodfactor.ca and Flood
Factor tour events in your area, and urge your
clients to do the same. Together, let's keep this
important conversation going.

THIS PAST YEAR
IN ONTARIO
ALONE, CATIQ
TRACKED OVER
$600 MILLION
IN INSURED
DAMAGE FROM
WEATHERRELATED
EVENTS.
JUNE 2018

http://www.floodfactor.ca http://WWW.IBAO.ORG

Table of Contents for the Digital Edition of The Ontario Broker - June 2018