Preliminary insured loss estimate for July GTA floods at $850 million, setting new record for Ontario

The severe thunderstorm that caused intense rainfall and flash flooding in the Greater Toronto Area July 8 caused more than $850 million in insured property damage, setting a new record in Ontario history.

“While these preliminary estimates are staggering, we do expect them to go even higher,” said Ralph Palumbo, vice president for Ontario at the Insurance Bureau of Canada, which released the estimate based on figures from The PCS-Canada Service.

While he said the industry was well-prepared for handling claims arising from the storm and floods, Palumbo added that damage from severe weather is another reason why the Ontario government should be cautious when imposing auto insurance premium and return on equity reductions without first reducing costs in the product.

Between July 8 and 9, the storm, with its record rainfall in Toronto, led to a power outage affecting at least 300,000 residents in the city, shut down subways, and left approximately 1,400 passengers stranded for hours on a GO Transit commuter train filled with water.

Since IBC and The PCS-Canada Service started collecting data on insured losses caused by extreme weather events in Ontario, the following events have been the most expensive, according to IBC:

• July 8-9, 2013 – $850 million (wind and thunderstorm event)
• Aug 19, 2005 – $671 million (wind/rain storm) – expressed in 2012 dollars
• July 24-28, 2009 – $ 228 million (heavy rain) – expressed in 2012 dollars

The PCS-Canada Service will re-survey insurers in 60 days to update its estimate of the total insured losses.

“IBC does not have a preliminary estimate of insured damages for Alberta that we are willing to release as work continues on the ground to determine the full extent of insured losses and to settle claims,” the organization also noted, referring to severe flooding in that province in June. “Any tabulation, at this point, is changing almost daily. We will eventually release a number but it will take more time.”