Floods and water damage, exacerbated by extreme weather, have become a growing concern for Canadian homeowners and business owners, according to the Insurance Bureau of Canada (IBC).
In 2024, more than 120,000 insurance claims were filed for damage caused by catastrophic flood and water events across the country, according to Catastrophe Indices and Quantification Inc.
This surge in claims has led to a higher demand for contractors to repair damaged properties.
Statistics show an alarming increase in the frequency and severity of flood and water damage events in Canada, which has impacted the insurance industry.
From 1995 to 2009, insured losses from flooding and water damage averaged $277 million annually. Over the last 15 years, that figure has increased nearly fivefold, with annual insured losses now averaging approximately $1 billion.
The year 2024 was a record year for insured losses from flood and water damage, with more than $4.1 billion in claims filed. Two significant flood events in the Toronto area in July and August 2024 resulted in nearly $2 billion in insured losses, while flooding caused by the remnants of Hurricane Debby in Montreal in August 2024 resulted in $2.5 billion in damages.
Additionally, an atmospheric river that led to flooding along the southern British Columbia coastline in October 2024 caused over $110 million in insured damage.
Choosing the right contractor is a crucial part of the insurance process, as it can help expedite repairs and ensure the claims process goes smoothly. The IBC provided several considerations on choosing a contractor:
While many insurers have established relationships with trusted flood and water remediation contractors and may offer guarantees on the work performed, insureds are not obligated to use the contractors recommended by their insurer.
If a policyholder chooses to hire an independent contractor, they should ensure the contractor is experienced, licensed, and reputable. Insurers often recommend contractors who are in good standing with business or trade associations.
Additionally, the IBC also suggests checking reviews and being cautious of contractors who offer deals that seem too good to be true or ask for large upfront payments. Some unscrupulous contractors may appear after significant weather events to take advantage of homeowners in distress, the bureau warned.
For insurance purposes, the IBC urged policyholders to ensure that any quotes or estimates provided by contractors are in writing. This helps avoid disputes and ensures that both parties have clear expectations. Verbal quotes or guarantees are unreliable and could lead to complications during the claims process.
Furthermore, due to a shortage of skilled labor, there may be delays in repairs, which could affect the timeline of your insurance claim. High-quality contractors are in demand because of their expertise. Insurers typically cover the cost of repairs as outlined in the policy, but the timeline for completing repairs may depend on contractor availability.
The bureau added that it is important to consult with a insurance adjuster to clarify the scope of coverage and your responsibilities in the claims process.
As the frequency of extreme weather events rises, homeowners and business owners must be aware of the impact on their insurance premiums and coverage. It is essential to regularly review a policy and ensure that it provides adequate protection in the event of a flood or water damage incident, the IBC said.
