The effects of Quebec's deadly weather on your insurance premiums
Climate change is a global concern, and in recent years its effects have been deeply felt across the country. One of the symptoms of climate change, so to speak, has been an increase in natural disasters, which, in turn, have destroyed property worldwide.
Canada is particularly vulnerable to deadly weather events due to its terrain. Quebec, which is especially humid and has recently experienced a significant increase in annual rainfall, has seen dramatic flooding. In recent years, millions of homes, vehicles, and properties have been damaged, and some weather events have even claimed lives.
Everything is affected by rising, deadly temperatures. What about your insurance? In this blog post, Panda7 will examine the rising costs of insured damages each year, how insurers are changing the way insurance is written to assess new catastrophe risks, and the impact on your insurance rates.
The costs of insured damages increase every year
In 2021, severe weather events in Canada caused over $2.1 billion in insured damages. Severe storms, wildfires, hailstorms, tornadoes, floods, and other factors have contributed to increased global losses, destroying commercial properties, residential buildings, and automobiles. Unfortunately, these losses appear to be increasing, as natural disasters destroy more and more assets each year, resulting in billions of dollars in damages.
Homeowners have to bear the brunt of all this. No house is built to be completely "stormproof"—although we can mitigate the impact of some storms with windproof shutters, new homes built to withstand high winds and other damage, fireproof roofs, and so on—which means that when extreme weather occurs, there's little we can do but file a claim. At this rate, climate change is considered... irreversibleThis means there will be steady increases in insurance premiums as millions of insured damages begin to accumulate.
Insurers are finding new ways to assess the risks of natural disasters
Times are changing, and so is insurance. Insurance companies are working hard to find ways to assess the degree of risk of extreme natural disasters, as well as to develop new insurance solutions that incorporate in-depth knowledge of the risks involved and the factors affected.
We expect a great deal of research on scientific correlations, and high-level analysis of relevant data is essential for determining overall trends and risks associated with natural hazards. Of course, this isn't new. Research on insured losses and natural disasters goes back decades, to the 1970s, when the climate crisis and its impending effects on our environment were becoming increasingly commonplace. Insurance specialists, in collaboration with environmental experts, assessed the wide range of natural hazards that could cause insured losses, such as storms, floods, volcanic eruptions, earthquakes, and cyclones.
Insurance rates are increasing
Unfortunately, all of this means that insurance rates are rising. Climate change is directly linked to the number of damages and asset losses suffered in our country, which, unfortunately, means more claims are being filed and suppliers have to pay for these claims.
Other factors are also influencing the increase in insurance rates. These include low interest rates and rising construction material costs – the repercussions of COVID-19-related shutdowns are still being felt across our economies.
Lower your insurance rates today
While you can't reverse the effects of climate change on your own, there are things you can do to help lower your overall insurance rates. Follow this list of tips to soften the blow that rising weather-related death tolls can have on your premiums:
- Do without paper
- Consolidate your insurance policies
- Buy surveillance systems for your home
- Install storm shutters
- Install a sump pump or backflow preventer in your basement.
- Replace your roof shingles with impact-resistant materials
- Increase your franchise
- Request eligible discounts
Weather insurance
Is there insurance for climate change? Well, no. Although it has been speculated about, no one can yet buy home weather insurance. A standard home insurance policy will always include coverage for severe weather incidents, such as wind, hail, fire, and lightning. Damage caused by floods, landslides, avalanches, and earthquakes is generally not covered by home insurance (which can sometimes surprise homeowners). In Quebec, flood insurance is strongly recommended due to the nature of the climate crisis we are experiencing.
Home insurance eAction is being taken to counter the latest threat. All Canadians – especially those living in Quebec – are advised to add surface water/flood coverage to their home insurance policy. Panda7 can guide you through the process of purchasing this endorsement. Get a quote or call us today.