Besides displacing thousands of people, polluting the air, and making New Yorkers mad at us, Canadian wildfires could also start driving up our insurance premiums.
Driving the news: Canada’s current spate of wildfires is expected to drive up home insurance prices across the country, industry experts warned The Globe and Mail.
- Natural disaster insurance claims in Canada have more than quadrupled since 2008, with extreme weather accounting for $3.1 billion of total insured losses last year.
To offset these historic losses, insurers have been raising prices. House insurance prices in Canada have gone up by ~14% over the past three years, per the Insurance Bureau of Canada (IBC), with premiums skyrocketing by 5% in just the past 12 months alone.
- Depending on the provider and province, you might not even be able to get a new insurance policy if you live between 25 km to 100 km from a wildfire-affected region.
Why it matters: With extreme weather events on the rise, Canada could grow increasingly uninsurable—something that’s already happening in California, where major insurers State Farm and Allstate have halted the sale of new property insurance policies due to wildfires.
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“Insurers track ongoing trends,” IBC’s VP of climate change told The Globe, “...and based on those longer-term models, we have seen premiums rising. As an insurer prices risk, we have seen in recent years that Canada is a riskier place to insure.”
- And it’s not just wildfires. As of last year, up to 10% of Canadian homes are already uninsurable for flood risk as insurers know that they will eventually be flooded.
Yes, but: California is an extreme case and Canada would likely see government intervention before a blanket freeze on new insurance policies, one expert told Global.—QH