The Insurance Bureau of Canada (IBC) is encouraging Canadians to take stock of their insurance coverage as part of broader emergency planning amid more frequent severe weather events.
Severe weather events have pushed insured losses to unprecedented levels, according to data from Catastrophe Indices and Quantification Inc. (CatIQ). Losses averaged between $1.6 billion and $3.5 billion annually from 2019 through 2023, before jumping to a record $8.9 billion in 2024.
The surge in claims is being driven by more frequent and intense floods, wildfires, hailstorms and wind events — hazards that have become increasingly costly for both insurers and policyholders.
As Emergency Preparedness Week unfolds across Canada, the insurance industry is emphasizing the growing financial risks posed by extreme weather, as well as the critical role insurance coverage plays in helping households and businesses recover.
“Insurance isn’t just a financial product — it’s a recovery tool,” the bureau noted in a statement. “Understanding what’s covered, what isn’t, and what steps can be taken to reduce risk is essential.”
Industry observers warn that coverage gaps remain a concern. While most standard home insurance policies cover wind and hail, protection against overland flooding or wildfire may require additional endorsements or be unavailable in some high-risk areas. The IBC has renewed calls for a national flood insurance program to address protection gaps, particularly for homeowners in flood-prone zones.
Alongside the insurance sector’s warnings, governments at all levels are increasing investments in climate resilience.
In recent years, provinces announced new initiatives ranging from updated flood mapping to modernized stormwater infrastructure and wildfire detection upgrades. While welcomed by the insurance industry, these efforts are seen as just one part of a broader strategy to reduce loss severity and protect insurability.
For insurers, rising catastrophe losses are prompting greater scrutiny of exposure and pricing models. Some policyholders in high-risk areas are already seeing higher premiums, tighter underwriting and, in some cases, limited access to coverage.
Against this backdrop, insurers are urging Canadians to take proactive measures. These measures range from reviewing policies and documenting possessions, to installing sump pumps and fire-resistant materials. Many insurers have expanded public education efforts to help individuals and businesses better understand how to protect themselves physically and financially.
“Emergency preparedness isn’t just about having a flashlight and bottled water,” the IBC stated. “It’s also about knowing you have the right insurance in place if the worst happens.”
