Canadian Underwriter

How much insurers paid out for Fort Mac’s spring flood

June 2, 2020   by Adam Malik

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Insurers paid out more $228 million in insured damage for spring flooding in Fort McMurray, Alta., that occurred a little over a month ago.

Catastrophe Indices and Quantification Inc. (CatIQ) released the numbers this week, noting that commercial properties took the brunt of the damage, with some losses hitting personal property and automobiles.

A news release from the Insurance Bureau of Canada, which included CatIQ’s stats, noted that regional authorities conducted surveys of initial damage and found that more than 1,200 structures were hit by the flooding. As people return to their properties, more assessments are being done. IBC’s release further stated reports of “extensive damage” from overland flooding and sewer backup.

Water levels rose by 4.5-6 metres (about 15-20 feet) along low-lying areas in Fort McMurray due to an ice jam that formed in late April along the Athabasca River. It forced about 13,000 people to evacuate from the area between Apr. 26 and May 2.

“Our thoughts are with the people of Fort McMurray who have been impacted by these floods,” said Celyeste Power, western vice-president at IBC. “While overland flood insurance is optional coverage and fairly new to the residential market, the insurance industry is here to help its customers through this challenging time.”

The announcement on insured damage has renewed IBC’s call for a national action plan on flooding.

A grocery store is surrounded by flood water on Franklin Avenue in Fort McMurray, Alta. on Monday, April 27, 2020. THE CANADIAN PRESS/Greg Halinda

“Flooding events like the ones in northern Alberta are costly, stressful and difficult for those affected,” Power said. “IBC wants to work with all stakeholders to reduce the financial strain and stress caused by future flood events. By working together, we can ensure that all Canadians, regardless of their flood risk, can access affordable flood insurance.”

Canadian Underwriter asked Public Safety Canada in May if at some point the industry can expect to have a low-cost national flood insurance program in place for homeowners at high risk of flooding. And if so, when.

The federal government department did not answer the question directly. A spokesperson did say the government will give “full consideration” to proposals made in an IBC paper released nearly a year ago.

Other significant Cat events in 2019 include a January storm — which began as rain and turned to snow — across Ontario and Quebec that caused $95 million in insured damage due to overland flooding, sewer backups and seepage.

In 2019, CatIQ reported multiple Cat events caused $1.3 billion in insured damage, ranking it as the seventh-highest loss year on record.


Feature image — Dr. Karl Clark elementary school on Franklin Avenue in downtown Fort McMurray is shown on Tuesday, April 28, 2020. Officials in Fort McMurray are keeping a close eye on river levels after a 25-kilometre ice jam caused major flooding and forced about 12,000 people from their homes. THE CANADIAN PRESS/Greg Halinda