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Homeowners need to beef up flood insurance amid climate change, diminishing green space

Glenn McGillivray is managing director of the Institute for Catastrophic Loss Reduction

Many Canadians are vulnerable to flood but don’t know it. This is at least partly because flood is almost universally viewed by property owners as a phenomenon associated only with rivers, creeks, streams and the like. But flooding can happen virtually any place where heavy rain may fall, which, for Canada, means just about anywhere.

Take the July 8, 2013, Toronto flood. Five years ago, Toronto and surrounding areas were hit with a rainstorm described by many as biblical. Slow-moving storm cells made their way over parts of the city, dumping more than 10 centimetres of rain at Toronto’s Pearson Airport in just two hours. Toronto’s densely residential west end, including parts of southern Etobicoke, were hit particularly hard. More than 21,000 basement flood claims were filed as a result of damage in Toronto, eastern Mississauga and other communities.

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Insured losses exceeded $1-billion (2016 dollars), making the event the costliest insured disaster in Ontario history (usurping the Aug. 19, 2005, rainstorm, which triggered extensive flooding in parts of north Toronto and elsewhere, causing $750-million in insured damage).

The 2013 Toronto event came just three weeks or so after record flooding in southern Alberta caused about $1.7-billion in insured and $6-billion in total damage.

But it would be a mistake to assume that because these two flood events had similar impacts that they also had similar causes. They didn’t.

While southern Alberta was largely the kind of flood that most people are familiar with (i.e. the kind that occurs when a river bursts it banks, often referred to as riverine or fluvial flooding), the flooding in Toronto came as a result of heavy but short-duration rainfall. Essentially, the kind of flood event that hit Toronto is generally unrelated to rivers, creeks and streams.

Urban floods can happen essentially in any community that gets a lot of rain in a short time, overwhelming drainage systems due to the sheer volume of water. Over the past few years alone, many Canadians have learned a hard lesson about urban flooding, including Ontario residents in Binbrook, Thunder Bay, Burlington and Windsor; and in Chestermere, Alta.; Saskatoon and Estevan, Sask.; and Sydney, N.S., to name but a few.

Both 2013 events, in Toronto and Calgary, caused a considerable amount of insured damage, even though at the time Canadian homeowners were not able to buy insurance for damage caused by surface water, known as overland flooding. Typically, homeowners were only able to purchase insurance against basement flooding caused by sewer backup.

The 2013 events changed that.

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Since February, 2015, Canadian homeowners have been able to purchase insurance for overland flood, though insurers have yet to offer the product in all provinces, and those at very high risk of flood may have a hard time finding coverage (another, preferably government-backed solution is needed for that subset of properties).

The development of overland flood insurance is good news for Canadian homeowners because as we continue to densify cities, tear up green space and add more impermeable surfaces (i.e. pavement and roofs), and continue to appoint basements as though they were main floor living areas, and as many places in Canada are projected to experience more frequent and/or more intense rainfall as climate change continues to dig in, the urban flooding problem will likely only worsen in the years ahead.

So the first order of business is to get the message out that essentially every community in the country is at risk of flooding caused by heavy rainfall. Canadian homeowners have to forget the notion that only those who live near waterways are at risk. It simply isn’t the case.

Second, homeowners have to take up mitigation measures to protect their properties against all kinds of flooding. So while municipalities have to step up their efforts to improve existing waste water and storm water systems and consider wholly new capital projects to address flood risk; homeowners, too, must step up and protect their properties (many basement floods are caused by problems on the private lot and have nothing to do with municipal drainage infrastructure).

Third, Canadian homeowners must financially protect themselves against a devastating flood by ensuring that they have the proper insurance in place to secure them against both basement flooding due to sewer backup (a traditional insurance product that has been available for decades) and overland flood (which only about a quarter of Canadians currently have in place).

All this because one thing is absolutely certain: The rain will come again another day.

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