As B.C. becomes more accustomed to changing environmental realities, businesses and homeowners alike are having to change insurance policies to better meet their coverage needs.
“We are still feeling the effects of Fort McMurray, which was the biggest lasting incident that caused a lot of damage … so, in the industry, there may be rate increases,” said Robbie Hoyte, senior commercial insurance adviser for Vernon-based Valley First, a division of First West Credit Union. “Some providers were more heavily invested in and hit a little harder in Fort McMurray than others when it comes to that situation.”
The 2016 wildfire disaster in Fort McMurray was the costliest natural disaster in Canada’s history, with insurance claims amounting to $3.7 billion, according to the Insurance Bureau of Canada, and many industries are still feeling financial repercussions today.
In 2017, wildfires cost B.C. more than $564 million and burned more than 1.2 million hectares of forest.
“Within B.C., last year was actually the worst fire season the province has ever seen,” Hoyte said.
With the magnitude and cost of climate-related disasters rising, insurance providers are still considering how best to handle them.
“With business owners, I haven’t seen any major shifts or transformations in the industry.… With the Calgary flooding that happened, the insurance industry got together and started offering flood coverage on residential property where it had also been available on commercial property.”
The Alberta flooding in 2013 was Canada’s second-costliest natural disaster, according to the Insurance Bureau of Canada, forcing more than 100,000 people from their homes and triggering $1.72 billion in damage claims. Due to the extensive damage, insurance companies that had previously insured only commercial properties began offering residential policies as well.
“That was one big shift,” Hoyte said. “With climate change there was an increase in flood coverage but … wildfire has always been an insured loss, so there hasn’t been any major new product offerings or adjustments to the industry. Because of that, there could be some price fluctuations.”
But that’s not necessarily always a bad thing, he added.
“The good thing with price fluctuations is that there is reinsurance in which insurance companies buy … [from] global insurance providers to help eat that cost when there is a large catastrophe like a giant wildfire or potentially an earthquake.”
Insurance providers have a rule of thumb that might help purchasers when considering what their fire coverage needs are.
“One thing I would advise business owners is to review their coverages before a potential fire starts. The issue that we are finding now is we are getting a lot of phone calls and inquiries about applying for insurance or increasing insurance coverages after a wildfire has already started,” he said. “[Insurance providers] are unwilling to offer coverage if there is an active forest fire usually within 50 kilometres of the property.”
But companies vary in their policy details depending on location and proximity to fires and at-risk regions.
“Some [companies] are 25 kilometres, some of them are 50 kilometres and it depends if you are within 1,000 feet of a fire hydrant,” said Sandra Lewis, manager at AC&D Insurance in Quesnel. “You can’t shop around your policy, you can’t buy a new home, you can’t do any changes if it’s within 25 kilometres.”
Tyler Nyquvest / Business In Vancouver