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Insured perils of concern to Canadians revealed

By HUB SmartCoverage Team on February 23rd, 2023

Canadians are no strangers to extreme weather but according to a new poll, winter storms top their list of concerns when it comes to insured perils.

Such storms edged out worries about severe rain or flooding according to a new Angus Reid poll in a coast-to-coats survey of 1,500 people. Nationally, 67 per cent were concerned about winter storms while 66 per cent were worried about flooding.

The poll, commissioned by First Onsite Property Restoration, revealed that 55 per cent were worried about the level of their insurance coverage for major weather events such as house fires, earthquakes, hurricanes, tornadoes, wind, winter storms, severe rains and flooding.

At 58 per cent, British Columbia residents were the most anxious about the level of their insurance, while Quebec residents appeared to be the least at 48 per cent. Those living in Ontario fell only one per cent below the national average.

Fears about severe rains or flooding were most acute in B.C. where 82 per cent said they were worried about water issues. That is not surprising since flooding last winter caused by atmospheric rivers caused $675 million in insured damage in the province. This year, the province has already issued alerts about two atmospheric rivers in the past month and a half.

Literally like “rivers in the sky,” atmospheric rivers are relatively long, narrow regions in the atmosphere that transport most of the water vapour outside of the tropics, as defined by the U.S. National Oceanic and Atmospheric Administration (NOAA).

“While atmospheric rivers are common during the fall and winter storm season, extreme weather similar to mid-November 2021 are rare,” a B.C. provincial government information bulletin said in mid-October 2022. “However, flooding is a common, naturally occurring event in B.C.”

Flooding was less in the mind of Albertans. In that province, 75 per cent of residents were preoccupied with that threat. The 2016 wildfire that burned Fort McMurray, Alta., to the ground cost Canadian insurers an estimated $3.6 billion in insurance payouts. That’s the record for the nation’s insurance loss to date.

Eighty-five per cent of B.C. residents were anxious about wildfires.

Meanwhile, Canadians living outside of B.C. appeared to care less about the threat of earthquakes.

In 2013, the Insurance Bureau of Canada published a study based on two earthquake scenario tests – a 9.0-magnitude earthquake in British Columbia and a 7.1-magnitude earthquake in the Quebec City-Montreal-Ottawa corridor. At the time, the study found ‘The Big One’ in B.C. would cause total damage of almost $75 billion overall, while an Ontario-Quebec earthquake would cost about $61 billion. (These estimates include both insured and uninsured losses.)

Almost 40 per cent of Canadians live in the earthquake zones of B.C., Ontario and Quebec. Sixty-five per cent of B.C. residents are concerned about earthquake risk, which is double the national average (35 per cent). However, fewer than half (46 per cent) of Quebec residents were worried about earthquakes, while only 29 per cent of Ontarians were.

Not surprisingly, given the $660 million of insured damage from Hurricane Fiona in September, Atlantic Canadians listed hurricanes as their top worry in the survey (61 per cent, versus the national average of 34 per cent). However, there is a precedent for inland hurricanes striking Ontario, where Hurricane Hazel caused $137.6 million in total damage in 1954 after hitting Toronto.

Home fires topped the list for Quebec residents at 66 per cent, although most other provinces were nearly aligned with the national average of homeowners anxious about fire at 65 per cent.

Tornadoes or severe winds were of most concern in Alberta (63%), Saskatchewan and Manitoba (67%) and Ontario (63%). Nationally, 58 per cent were worried about damage due to tornadoes or severe wind.

This year, a derecho wind event in Ontario and Quebec caused an estimated $875 million in insured damage, according to Catastrophe Indices and Quantification (CatIQ). In Quebec, fears about wind damage were at 56 per cent, which fell just two per cent below the national average.

  • With files from Canadian Underwriter

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