As wildfires rage throughout the northern Alberta city of Fort McMurray, the extent of damage is beginning to emerge – and the estimated cost to insurers is to be at least in the hundreds of millions. Over 10,000 hectares have been consumed by the flames with over 1,600 homes and buildings destroyed and no slowdown in sight, as flames are fueled by 30 km per hour winds and dry seasonal conditions.
Over 80,000 people have been evacuated from the city with, miraculously, no reported injuries or deaths.
George Hodgson, chief executive officer of the Insurance Brokers Association of Alberta, says insurers will have an “all-hands on deck” approach as the situation develops.
“…once people are safe, they’ve left Fort McMurray and they’re in an evacuation centre in Edmonton, or wherever that may be, and they know their home is gone, the next thing they want to know is how to get their home back,” he says. “And the first person they’re going to want to contact is their insurance company or broker or agent.”
He compares the fire to the catastrophic events that occurred in 2011 in Slave Lake when flames wiped out nearly all homes, costing insurers $742 million. “I don’t know that the fire itself is bigger than at Slave Lake, but it is attacking a community that is much larger than Slave Lake. My understanding is that this looks like this could be much the same scenario,” he says.
One hundred firefighters are on location with more being sent from across Canada to help battle the fire, which is expected to move east toward the city’s airport. A “perfect storm” of conditions such as lack of humidity and a higher-than-seasonal temperature of 32.6 degrees C contributed to the fire’s rapid expansion.
“All that has to happen, is the wind has to turn,” says Hodgson. “Apparently, at one point yesterday, everything was looking fine and then half an hour later there was an evacuation.”
Damage is anticipated to range from completely destroyed to salvageable. The Beacon Hill, Abasand and Waterways communities are hardest hit, with 50 – 90% of homes destroyed.
Forest fire season has started earlier than usual in Alberta, according to the
Insurance Bureau of Canada. “This is the beginning of what could be a very concerning wildfire season, evident by the fact that it has started earlier than usual,” stated Bill Adams, Vice-President, Western & Pacific, IBC, in an April release. “It is vitally important that everyone pay close attention, and respect fire bans, advisories and warnings.”
