Severe flash flooding in Montreal and other parts of Quebec between July 13 to 14,2025, caused nearly $120 million in insured damage, according to initial estimates from Catastrophe Indices and Quantification Inc. (CatIQ).
The latest disaster brings insured losses from weather events across Canada this year to more than $1.6 billion.
The Insurance Bureau of Canada (IBC) noted that insurers are again on the ground helping customers recover but stressed that repeated events highlight the need for broader adaptation.
“These extreme weather events serve as a reminder of the need to adapt collectively and make our communities more resilient,” said Laurent Fafard, vice-president, Quebec Region at IBC.
Although the insured losses fall below the levels seen in Quebec’s 2017 and 2019 spring floods, which each topped $200 million, the frequency of severe weather events is heightening pressure on both insurers and reinsurers. Industry experts said reinsurers are increasingly cautious about Canadian flood exposure, especially in urban centres like Montreal, where aging infrastructure compounds the risk. Rising reinsurance costs are feeding directly into higher premiums for policyholders.
Flood coverage remains one of the most challenging areas for the industry. Standard home insurance policies do not typically cover overland flooding, and homeowners often must purchase separate add-ons for risks such as groundwater seepage, sewer backups or river overflow. Vehicle damage is only covered if policyholders purchased optional protections such as comprehensive or all perils coverage. These gaps are drawing attention from reinsurers, who warn that underinsurance in high-risk regions could create coverage gaps too large for the private market to handle alone.
Meanwhile, the IBC is again urging governments to step in, including by halting construction in high-risk floodplains, investing in community defences, and subsidizing home retrofits. The bureau also called for a federal coordinating agency for disaster preparedness, noting that every other G7 country has one in place.
For reinsurers, the mounting bill underscores a structural issue - as climate disasters intensify, loss volatility in Canada is rising. With last year’s record $8.5 billion in insured damages already weighing heavily on the sector, the 2025 Quebec floods serve as another reminder that climate risk is reshaping the insurance and reinsurance landscape.
