A thunderstorm moved through Airdrie and Calgary on Monday, just ahead of the one-year anniversary of the August 2024 hailstorm that caused more than $3 billion in insured damage.
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The Insurance Bureau of Canada is warning that repeated severe weather continues to threaten communities and strain insurance systems across Alberta.
The 2024 storm became the second-costliest natural disaster in Canadian history. In an Aug. 5 news release, IBC commended residents for their resilience but said the frequency and severity of hailstorms demand urgent policy reform.
“The August 2024 hailstorm was a traumatic event for tens of thousands of residents, with hail, strong winds and heavy rain causing severe damage to homes and vehicles,” said Aaron Sutherland, Vice-President, Pacific and Western, IBC. “Calgarians have shown tremendous resiliency over the past year and insurers have worked tirelessly to help them recover. The extent of repeated hail damage in the city should be a clear wake-up call to strengthen our resilience and adapt more effectively to our new weather reality.”
Less than a month ago, on July 13, the city was hit again by an intense hailstorm that has been declared a catastrophic event, with damage expected to exceed $30 million.
According to IBC, Alberta has experienced at least one major hailstorm every year for the past two decades, resulting in more than $10 billion in insured damage. The past five years alone have accounted for $5.5 billion of that total.
“Alberta is Canada’s hotspot for catastrophic weather events. The province has seen more damage and a higher number of associated insurance claims than any other province in Canada,” said Sutherland. “Over the past decade, Alberta has accounted for nearly half of all insured severe weather losses in Canada, placing pressure on insurance premiums that will continue to grow unless governments take action to better protect communities and our property.”
IBC is urging governments at all levels to:
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Revive Calgary’s Resilient Roofing Rebate Program, which provided homeowners with financial assistance to retrofit their homes to better protect them from hail damage;
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Mandate the use of hail-resistant roofing and siding in all new construction in high-risk areas; and,
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Improve hail notification services so that residents are better able to prepare and move vehicles out of harm’s way.
IBC stated that more than half of the claims from the August 2024 hailstorm — about 70,000 — were for vehicles, with estimated damage of roughly $1 billion.
As severe weather and other pressures climb, IBC said the cost of providing auto insurance continues to increase. However, Alberta has frozen or capped auto insurance rates below the cost of providing coverage for the past three years — “the longest period of government interference in auto insurance in Canadian history,” according to the release.
“With premiums no longer reflecting the cost of providing auto insurance coverage, Alberta auto insurers paid out $1.20 in claims and expenses for every $1 they earned in premiums in 2024,” IBC stated. “This is not sustainable.”
“Alberta’s auto insurance system is in crisis,” said Sutherland. “The government must remove the rate cap and ensure the Care-First reforms are implemented effectively – especially by reining in legal costs, as promised. IBC continues to work with the government to get the details right. Without meaningful change, consumers will face fewer insurance coverage options and growing frustration.”
“Unless rates are permitted to reflect the actual cost of coverage and Alberta’s auto insurance market is returned to health, the success of the government’s Care-First reforms will be placed in jeopardy,” IBC stated.
At the national level, IBC is calling for governments to:
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Halt the construction of unprotected homes and businesses in high-risk flood and wildfire zones;
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Invest in vulnerable communities to ensure they are FireSmart and better protected against flooding;
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Help homeowners understand the specific risks they face in their area; and
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Subsidize home retrofits to help reduce exposure to floods and wildfires.
IBC said Canada also needs a federal coordinating agency to lead emergency preparedness and recovery efforts, “ensuring communities are not left to develop their own response plans from scratch after every catastrophic event.”
“Every other G7 country has an agency operating in this capacity,” IBC stated. “It’s time for Canada to follow suit and take on a proactive approach to emergency management.”
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