Up to 10% of homes could now be 'uninsurable' because of flood risk. Yours may be one of them

Posted on Feb 7th, 2022

Many homeowners are unprepared for flooding because they lack critical information thanks to murky real estate rules, incomplete floodplain maps and an insurance industry pulling back from high-risk areas, a Marketplace investigation has found.

Marketplace also found homeowners who lost their flood protection because of multiple claims or specifically because of the growing risk of climate change. The Insurance Bureau of Canada (IBC) warns it's a situation more Canadians could find themselves in.

The IBC told Marketplace it estimates that anywhere from six to 10 per cent of Canadian homes are currently uninsurable due to flooding and that estimate could go up as more insurance companies update their risk assessments to account for the rising threat of climate change.

"As the risk from climate change increases, yes, more Canadians could become uninsurable," said Craig Stewart, vice-president, federal affairs with the IBC.

According to a 2019 federal government report, Canada's climate is warming at double the rate of the rest of the world, and the IBC estimates that currently 1 in 10 Canadian homes is at high risk of flooding and some face possible repeated flooding over the next 20 years.

But would prospective homeowners be warned about that risk? Going undercover, posing as new homebuyers in Ontario, a Marketplace team found there's no Canada-wide requirement for agents or sellers to warn potential buyers that they're moving into a flood-prone area. Marketplace was told on two occasions that homes were not in floodplains when public data showed otherwise. In another test, a producer posing as a prospective home seller also found agents didn't always advise her to disclose past flood damage.

The recent flooding in British Columbia has made the issue of flood insurance coverage top of mind for many homeowners, as some residents there, unable to find coverage, turn to provincial disaster assistance, and others assess what coverage they have as the cleanup begins. 

Original article: https://www.cbc.ca/news/canada/marketplace-home-insurance-1.6262386