What the Nova Scotia floods cost insurers

A flood and rainstorm event that hit Nova Scotia in July is estimated to have caused over $170 million in insured damage, according to initial estimates from Catastrophe Indices and Quantification Inc. (CatIQ). 

The atmospheric river event dropped more than 250 millimetres of rain in a 24-hour span on Halifax, Nova Scotia’s South Shore, and central and western parts of the province. 

Nova Scotia declared a state of emergency because of the storm, which killed four people. The province suffered significant damage to infrastructure, and flooding to homes and businesses. Provincial officials also confirmed damage to parts of the CN rail line that run to the Port of Halifax. 

The storm also caused flash flooding, power outages, and washed-out roads and bridges in areas already affected by a June wildfire in Halifax, which cost the industry nearly $165 million in insured damage, according to CatIQ. 

There was also a significant amount of overland flooding in the Bedford area, Michael Connolly, vice president of Atlantic Canada Operations at ClaimsPro told Canadian Underwriter at the time. 

The industry would’ve seen insured losses in excess of CatIQ’s estimated $170 million were it not for the lack of overland flood coverage, which left residents underinsured, the Insurance Bureau of Canada (IBC) said.  

“The availability of overland flood insurance remains limited in high-risk flood-prone areas, and sadly, many of the properties damaged or destroyed by this event will be uninsured,” Craig Stewart, IBC’s vice president of climate change and federal issues, said at the time. “The reality is the total losses for this event will be significantly higher than the insured losses, largely due to the number of uninsured properties, as well as damage to public infrastructure.” 

Although the type of losses sustained in the flood were comparable to Hurricane Fiona, final claims totals weren’t predicted to be nearly as high, adjusters told Canadian Underwriter at the time of the flood.  

Michael Galea, senior vice president of operations at Sedgwick, said at the time the initial claims volume had not been as high as Fiona, which cost the industry an estimated $800 million.  

However, the flood hit soon after the devastating wildfires, and less than a year after Hurricane Fiona hit Atlantic Canada. “Contractors are already busy dealing with Fiona from last fall and the wildfires as of late,” Galea told CU in July. “This will be a continued strain.” 

Plus, stakeholders are advocating for better emergency preparedness for climate disasters in the province.  

Firefighters say an emergency alert warning people to stay home during recent flooding in Nova Scotia took close to two hours to send, according to the Canadian Press.  

For its part, IBC is says it is working closely with the federal government, provinces and territories to improve Canada’s climate defence and build resilience to climate change.   

IBC says water-related damage is responsible for most severe weather damage in Canada, which is routinely causing insured damage in excess of $2 billion annually.  

“Over the last decade, there have been 35 catastrophic flooding events across Canada, in which insured losses exceeded $30 million per flood,” IBC said.
 

Buildings are seen in floodwater following a major rain event in Halifax on Saturday, July 22, 2023. A long procession of intense thunderstorms have dumped record amounts of rain across a wide swath of Nova Scotia, causing flash flooding, road washouts and power outages. THE CANADIAN PRESS/Darren Calabrese