TORONTO — A new report says the cost of insured damage caused by severe weather last year hit a record high as it totalled more than $8 billion.
"This has been a historically devastating year for Canadians," said Celyeste Power, president and CEO of the Insurance Bureau of Canada.
According to Catastrophe Indices and Quantification Inc., the cost of insured damage totalled $8.55 billion for 2024, easily topping the previous record of $6.2 billion from 2016 when wildfires tore through Fort McMurray, Alta.
The Insurance Bureau of Canada says the summer of 2024 stood out as the most destructive season in Canadian history for insured losses.
"What we have to remember is this isn't an anomaly. It's not bad luck. This is now our new normal," said Power.
The season saw $3 billion in damages related to a storm in Calgary that saw hailstones as big as golf balls hammer the city's airport in August, damaging aircraft and forcing airlines to ground planes for repairs and inspections.
August 2024 also saw the remnants of hurricane Debby do $2.7 billion in insured damage as half a million residents in Quebec had their power knocked out.
The Jasper wildfire caused $1.1 billion in insured damage in July and August.
Insurers are bracing for higher losses each year, said Matt Hands, vice-president of insurance for Ratehub.ca.
"Everybody's playing a game of catch-up," he said.
Insurance companies are looking at how to make up for higher losses not only through pricing but also through mitigation, he said.
Over time, insurance prices have risen for Canadians, with severe weather one of the major drivers, Hands said.
"The biggest thing that we as consumers see is just that we're seeing the hit in our wallets."
IBC said in a news release that severe weather-related losses are escalating across Canada and are having a disproportionate impact on home insurance costs.
"As insurers price for risk, this increased risk is now impacting insurance affordability and availability," said Craig Stewart, IBC's vice-president of climate change and federal issues, in the release.
He called on governments to be more proactive by investing in flood-defensive infrastructure, ensuring homes aren't built on flood plains, and making other changes that would protect people and their homes from extreme weather events.
Power said the 2024 numbers should serve as an alarm that without those kinds of investments, extreme weather will continue affecting hundreds of thousands of Canadians every year.
"We need governments to take action to reduce the risk in these communities, to stop building in wildfire zones and on flood plains so that we can better protect Canadians moving forward, and, of course, make sure that insurance remains available and affordable right across our country," she said.
Hands agreed the government needs to be part of the solution in order to keep insurance affordable and available.
"It can't just be on the insurance companies to figure out how to provide more affordable insurance. This is a systemic issue beyond the price of insurance," he said.
"It's where we choose to build homes, the type of materials we use, and all that are putting our properties at risk."
This report by The Canadian Press was first published Jan. 13, 2025.
Rosa Saba, The Canadian Press
