The Insurance Bureau of Canada (IBC) has been collaborating with the federal government for the smooth rollout of a national flood insurance program, with the aim of launching it by April 1, 2025.
“You will continue to buy home insurance the way you do through your existing insurer, but you will have access to comprehensive flood insurance, which will protect you,” said Craig Stewart, IBC vice president of climate change and federal issues, in an interview with CBC News.
The 2023 federal budget has allocated $31.7 million over three years, commencing in 2023-24, to establish a low-cost flood insurance program aimed at safeguarding households at a high risk of flooding and are without access to adequate coverage.
Although the exact terms of the program are still under development, Steward said the coverage could extend up to $300,000 with an affordable deductible. Considerations are also being made about capping premiums to incentivize residents in high-risk areas to pay for protection.
“You're paying for the risk you face but it's not going to bankrupt you, so the idea is to cap the coverage to keep the program affordable,” he said.
The Department of Public Safety told CBC News that once affordable flood insurance becomes accessible to Canadians, federal cost-sharing for flood-related residential damages will cease under disaster financial assistance arrangements.
It added that other forms of government support, such as evacuations, emergency responses, psychosocial aid, and transportation route clearing, will remain eligible.
“The decision on whether to continue to deliver disaster financial assistance for insurable flood damages within their respective jurisdictions will lie with the provinces and territories,” the department stated.
Flooding is considered one of Canada’s most frequent and expensive natural disasters, with the department’s task force estimating an annual average of $2.9 billion in residential flood-related costs.
There are around 1.5 million households currently located in high-risk flood areas, according to IBC estimates.
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