Canadian Underwriter

These two provinces now have storm surge and overland flood coverage

January 7, 2019   by Jason Contant

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Homeowners in Quebec now have storm surge coverage available, while homeowners in Manitoba are covered for overland flood damage, The Co-operators said Monday.

Storm surge, which includes rising water levels and waves caused by storms, presents a significant flood risk, especially in coastal regions where extreme weather patterns have intensified with the changing climate.

“We believe this coverage is important, especially for Canadians living on our coasts,” Tara Laidman, program director of The Co-operators’ flood initiative, told Canadian Underwriter Monday. “In the Pacific and Atlantic coasts, we see storm surges happening on a frequent basis.”

Storm surge can also happen in large bodies of water, such as the Great Lakes, Laidman added. In 2018, the Atlantic coast was hit with many storm surges, impacted significantly from hurricane season. Atlantic Canada was also hit by major flooding in April and May.

“Outside of the coasts, we have also seen flooding in the Gulf of the St. Lawrence, Bay of Fundy, Hudson Bay, James Bay, Beaufort Sea and the Great Lakes and other large lakes to name a few,” she said. “Our coverage does not distinguish between salt water and fresh water; we are covering all storm surge.”

As of Monday, the product is available to all homeowners across the country. To coincide with the launch in British Columbia and Nova Scotia in May 2018, storm surge coverage was added to all Comprehensive Water policies in Ontario and Alberta, Laidman said. In August 2018, the product was launched in Atlantic Canada, Saskatchewan and the territories. Monday’s launch in Quebec and Manitoba means the coverage is now available country-wide.

“Overland flooding has been identified as the most pervasive and costliest cause of damage to Canadian homes, yet most are inadequately protected against this growing risk,” said Rob Wesseling, president and CEO of The Co-operators, in a press release. “Today, we are thrilled that this product is available to all Canadian homeowners, even those at the highest risk, adding another layer of protection and providing peace of mind for those who need it most.”

The risk of storm surge is assessed in many ways, The Co-operators explained, including historical water and sea-level rise in coastal regions, digital elevation models and loss mitigation efforts. For its part, the insurer’s flood model incorporates data on elevation, soil, rainfall, river flow, government-controlled defences like dams and channels, and other factors that help predict areas at risk of flooding.

The Co-operators first offered overland flood insurance in Alberta in 2015, expanding the coverage to Ontario in 2016. Canadian Underwriter asked Laidman if the insurer has received any feedback from brokers or consumers on the product, or any changes/suggestions they would like to see.

“Yes, when we first launched our product in Alberta in 2015, it did look a bit different,” she said. “There were some things that were not originally covered.”

For example, at the time, coverage did not include storm surge or service pipe coverage (for the cost to repair or replace pipes when damage occurs). “We received feedback from our advisor group that clients were looking for these types of coverage,” Laidman said. “We made changes after our Alberta launch to include these items. We will continue to focus on what clients need and make changes when appropriate.”

A 2017 study by Partners for Action reported that 94% of Canadians living in high-risk flood zones are unaware of their risk, while less than 30% are taking action to protect their property from flood risk.