GUELPH, ON, Sept. 17, 2013 /CNW/ - Canada is the only G8 country in
which insurance against overland flooding is not available to
homeowners - but does it have to remain that way? A study released
today that explores issues related to flooding and property insurance
aims to advance informed discussion of the potential to better protect
Canadian homeowners. It reveals that while insurance executives are
concerned about the lack of flood insurance and agree on many of the
associated issues, opinions remain mixed concerning its viability in
The study, entitled Assessing the Viability of Overland Flood Insurance: The Canadian
Residential Property Market, was commissioned by The Co-operators and undertaken by Dr. Jason
Thistlethwaite and Dr. Blair Feltmate of the Faculty of Environment at
the University of Waterloo. The researchers interviewed CEOs and other
executives at insurance companies accounting for 57 per cent of the
property insurance business in Canada, seeking to better understand
their perceptions of the risks and opportunities related to insuring
homes against overland flood damage. The interviews were conducted
during the winter of 2013 - before this summer's catastrophic floods in
Alberta and the Greater Toronto Area.
Although coverage for some damage related to flooding, such as sewer
back-up, is available, property insurance in Canada does not cover
losses from overland flooding, which is by far the most common type of
natural disaster in Canada. Those whose homes suffer uninsured damage
from floods and other natural disasters may be eligible for some
compensation from the federal government's Disaster Financial
Assistance Arrangements (DFAA).
The purpose of insurance is to spread risk among a large number of
policyholders whose premiums are pooled to cover future claims.
Flooding presents a challenge in this regard because it is a
significant risk only for the small percentage of homeowners who live
in areas prone to flooding, making insurance prohibitively expensive
for those who need it.
"The way things stand, property owners are not adequately protected
under a system that places too much emphasis on recovery at the expense
of mitigation," said Kathy Bardswick, president and CEO of The
Co-operators. "There is no question that this is a complex issue that
requires a multi-stakeholder solution involving insurers, governments,
developers, banks and homeowners. This report identifies the key
issues, challenges and opportunities and we're eager to engage these
stakeholders to build upon this research and work toward a solution
that better protects our communities and our economy."
The study revealed widespread concern among participants about
governments' approach to flooding. Too little is invested in flood risk
mitigation and adaptation, while the DFAA helps homeowners recover
after a storm without providing incentives for preventive measures
Among the other key concerns participants agreed upon were the lack of
reliable information, particularly inadequate flood mapping, and the
need for additional investments in flood defences. Those interviewed
also "generally shared the same opinion on the major characteristics of
flood insurance necessary to make it a viable product."
A key recommendation of the report is to "initiate a broad-base
discussion on the actions necessary to improve flood and disaster risk
management with key stakeholders." The Co-operators has committed to
following through on this recommendation in the months ahead.
To view the report, please visit the Sustainability section under the
About Us tab at www.cooperators.ca.
About The Co-operators:
The Co-operators Group Limited is a Canadian-owned co-operative with
more than $33 billion in assets under administration. Through its group
of companies it offers home, auto, life, group, travel, commercial and
farm insurance, as well as investment products. The Co-operators is
well known for its community involvement and its commitment to
sustainability. The Co-operators is listed among the 50 Best Employers
in Canada by Aon Hewitt; Corporate Knights' Best 50 Corporate Citizens
in Canada; and the Top 50 Socially Responsible Corporations in Canada
by Sustainalytics and Maclean's magazine. For more information visit www.cooperators.ca.
SOURCE: The Co-operators
For further information:
Dr. Jason Thistlethwaite
University of Waterloo
Dr. Blair Feltmate
University of Waterloo