The rising cost of climate change impacts home owners

Fire, floods and rising costs

The summer has just begun, but so far it’s been another year of extreme temperatures, record wildfires from coast to coast, tornados, droughts and flooding. It’s hard to ignore that we are living the effects of climate change. And those effects are costly.

Last year alone, insured damages from extreme weather events in Canada were over $3 billion dollars, and the 2021 heat dome and atmospheric river events caused more than $5 billion in damages in British Columbia.

These annual costs have more than quadrupled over the last 15 years and all the projections are that they will continue to increase until we manage to eliminate our carbon emissions. While many individuals and governments seem reluctant to make sufficient investments in climate action to reduce those emissions, it seems they are also reluctant to acknowledge the cost of inaction.

For most of us, the direct impact of climate change may be limited to annoying inconveniences such as smoky summer days or stifling heat that keeps us indoors. But for many Canadians the impacts are life changing—the loss of homes to fire or flood, or the loss of crops and income from drought.

But all of us will see rising costs as climate change intensifies, and one sector that will lead the way is home insurance. As insurance companies face higher claims year over year, they will have little choice but to increase premiums, and that has already started to happen.

Even more concerning is the increasing trend in the United States to simply not offer home insurance at all. In California, major companies such as Allstate and State Farm have stopped selling new home insurance policies because of the frequency of catastrophic fires. Similarly, in Florida, insurance companies are not taking on new customers or renewing existing policies because of flooding associated with higher sea levels and stronger storms, and those that can get insurance are paying an average of $4,000 per year.

I met with the Insurance Bureau of Canada recently, and they pointed out that it’s becoming difficult to buy a home in fire-prone areas of the country during the summer. Most companies simply won’t provide new insurance when there is an active wildfire close to a home (25 to 100 km in some cases), and in many recent years that impacted sales in several parts of British Columbia.

It’s also becoming harder to get flood insurance on homes, in fact over 10 percent of homes in Canada are considered to be in high flood risk areas and can’t be insured. The federal government is planning on rolling out a flood insurance program that will backstop insurance companies providing affordable coverage to Canadians living in flood-prone areas.

Climate change impacts aren’t limited to fires and floods. I’ve been talking with the wine industry in the Okanagan Valley about the effects of last winter’s early hard frosts that will likely cut this year’s grape harvest in half and killed many vines outright. The federal government came up with supports through the AgriRecovery program to help Ontario and Nova Scotia vineyard owners hit with similar winter kill a year ago, and I’m hoping we can find support from both the federal and provincial governments to keep this important industry thriving in B.C.

It’s clear that we must recognize the devastating impacts of climate change on the lives of Canadians. And to reduce the human and financial costs of these extreme weather events, we must make bolder investments to reduce our emissions and to prepare our homes, businesses and communities for future challenges.

Over the coming years these investments will save ten times their costs in avoided damage and loss of personal property, and will also allow us to live healthier, longer lives.

Richard Cannings is the NDP MP South Okanagan–West Kootenay.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

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