Four catastrophic weather events this summer caused over $7 billion in insured losses, making 2024 the worst year on record for weather-related damages in Canada, according to preliminary estimates from Catastrophe Indices and Quantification Inc. (CatIQ).
The extreme weather, which included storms, fires, and floods, resulted in approximately 228,000 insurance claims across the country – a staggering 406% increase compared to the 20-year average. The Insurance Bureau of Canada (IBC) says that this summer has set an alarming precedent and highlights Canada's lack of preparedness for the escalating impacts of climate change.
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"This has been a devastating summer for hundreds of thousands of Canadians. Relentless storms, fires, and floods have pushed insured losses to unprecedented levels," said Celyeste Power, President and CEO of IBC. "These events are escalating at a shocking rate, and Canada is simply not prepared. The insurance industry is committed to working with governments across the country on a collaborative approach to adapting to our changing climate and building resilient communities."
Four Catastrophic Events Contribute to Historic Losses
The summer of 2024 saw four significant weather disasters that contributed to the historic losses:
- Flooding in Toronto and parts of southern Ontario: $940 million
- Wildfires in Jasper: $880 million
- A hailstorm in Calgary: $2.8 billion
- Flooding in regions of Quebec: $2.5 billion
The total insured damage from these events has pushed the year-to-date tally to more than $7.7 billion, far surpassing previous records.
A Call for a "Whole-of-Society" Approach
For nearly a decade, the IBC has been urging governments to take action to address Canada's changing climate. The insurance industry is now calling for a collaborative, national strategy to reduce disaster risks and protect communities. Craig Stewart, Vice-President of Climate Change and Federal Issues at IBC emphasized the urgent need for a united response.
"Insurers are paying out more in claims for a single event than the federal government has allocated to climate adaptation over the past decade," said Stewart. "Canada needs to be prepared for the next disaster. This is not a time for finger-pointing. Governments and the private sector must work together to better protect Canadians and their communities."
Stewart also pointed to the federal government’s National Adaptation Strategy, launched in June 2023, which has seen little progress in achieving its targets. He stressed the importance of coordinated efforts across all levels of government to fund resilient infrastructure, such as flood defences and upgrades to stormwater systems, to ensure that future homes are protected against severe weather.
Rising Costs and the Risk of Insurability
As insured losses from catastrophic weather continue to climb, the IBC warns of an impending insurability crisis. With millions of new homes being built across Canada, many of them in flood-prone or wildfire-risk areas, there is growing concern about whether insurance will remain available and affordable for homeowners.
"The costs from climate-fueled disasters are mounting, yet action from governments to reduce risk is stalled," Stewart said. "Municipalities are being funded to build new homes on flood plains and wildfire-prone areas. We need to invest in disaster mitigation measures to protect Canadians and ensure the long-term viability of insurance."
As the impacts of climate change intensify, this summer serves as a stark reminder that immediate action is needed to build resilience and protect Canadian communities from the devastating effects of severe weather.