News & Resources

Canadian Insurance Companies Offering New Protection from Flooding

June 10, 14
3 mins
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Two Canadian insurance companies are tackling the flood damage issue with different solutions.

Intact Financial Group, Canada's largest property and casualty insurance company, has teamed up with the University of Waterloo to start projects involving ripping out asphalt and concrete surfaces in various Canadian communities and replacing it with trees, plants and other porous surfaces to help absorb water to avert flash flooding.

Calgary-based Beaufort Group is going a more conventional route by introducing Canada's first overland flooding insurance policy. While sewage backup coverage has been a mainstay in insurance policies for decades, damage caused by water entering through doors and windows has never been available for homeowners until now.

Spurred by the devastation resulting from the last summer's flooding in Alberta with damage estimates exceeding $5 billion, of which $1.7 billion were insurable losses, Beaufort worked with Lloyds of London to put a package together in time for flood season in Calgary in 2014.

Beaufort reports that only a limited number of Calgary households are eligible to receive the insurance, which must be purchased in addition to a regular homeowner's policy, and cost of premiums and deductibles will vary considerably. Beaufort determines the cost of each premium based on such factors as history of water damage, the home's value and proximity to the river.

While customers in other Canadian cities will have to wait and see if other insurance agencies follow suit with similar overland flooding policies, those in the 20 pilot project locations selected by Intact and University of Waterloo will have at least some additional measure of protection to look forward to.

Intact will contribute $700,000 to the anti-flood "Depave Paradise" projects over three years and has so far named four Ontario communities, including Mississauga, Peterborough, Kingston and Ottawa in addition to Calgary to get flood-proofing treatments. Among these are construction of bio-swales to serve as holding tanks for heavy rainfall as well as conducting restoration in urban wetland areas.

Researchers from the University of Waterloo say these simple, relatively inexpensive steps such as tearing out asphalt and replacing it with porous brick and gravel can save billions of dollars in flood damages. Sealed topsoil in household and business areas in Toronto, Calgary and nearby areas could not absorb the massive influx of rain experienced in the summer of 2013, forcing the water unto basements, subway tunnels and underground corridors. Another area that needs to be addressed is the aging storm-sewer infrastructure in many communities as they are currently less capable of withstanding huge torrential downpours.

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