As the regional municipality of Wood Buffalo deliberates on how to mitigate its rising flood risk, one Fort McMurray neighbourhood is requesting officials to consider buying out the entire area.
The neighborhood of Longboat Landing in Fort McMurray is a cluster of condominium complexes, composed of 360 homes with a population of 720. Unfortunately, none of the properties were constructed above the flood zone, and all of the structures were affected by the recent flooding in April.
Wood Buffalo had recommended that berms be constructed to protect Longboat Landing from future flooding, which would cost about $8.6 million. However, many residents of the community are instead requesting for a full buyout of the neighborhood, which would cost approximately $97.5 million, CBC News reported.
One local insurance expert believes the buyout is simply not feasible.
According to Bryce Kumka, senior account executive with Rogers Insurance, Longboat Landing saw an estimated $10 million in insured damage due to the April flood – together with the cost to construct the berms, the amount is far lower than the estimated cost to buy out the entire neighborhood.
"It doesn't make a lot of economic sense to do a large-scale buyout when the protection is cheaper to install," Kumka told CBC News.
Rogers Insurance is the broker of all but one of the buildings in Longboat Landing.
Kumka added that while the availability of insurance in high flood risk areas like Longboat Landing is limited at best, the addition of berms would give condo corporations in the area a better chance to secure coverage, since the berms would mitigate some of the flood risk.
Securing flood insurance in a high-risk area may be one thing, but ensuring they are affordable enough is a whole other issue. Fortunately, some insurers have reacted positively to news of flood mitigation efforts.
A municipal representative told CBC News in an email statement that when insurance costs for condos increased in November, the mayor sent a letter to both the federal and provincial governments requesting them to look into the cost of insuring local buildings at high risk of flood.
The representative also said that during recent town meetings, insurance company representatives said constructing flood mitigation projects would positively affect the insurance coverage of at-risk buildings.
