Public relief and insurance for residential flood losses in Canada: Current status and commentary

Abstract

Flood-affected households in Canada rely on a complex arrangement of public disaster assistance and partial private insurance coverage for flood recovery. Recently, calls have been made for a review of the role of private insurance in residential flood losses; however, there are many challenges associated with the introduction of private flood insurance. Some ways to increase the viability of flood insurance include providing flood coverage for a variety of flood types, limiting coverage for very high-risk households and implementing risk-based coverage. To be effective, flood insurance will further require households, insurers and governments to participate in the reduction of flood risk. Governments and insurers should work toward a national, consistent approach to flood hazard assessment that includes assessment of a variety of flood types that affect households and supports both non-structural flood risk reduction and insurance pricing. Governments and insurers should further work to reduce the number of very high-risk households and improve the quality and accessibility of flood loss data. Furthermore, households will have to become better informed of the specifics of insurance coverage and bear a portion of flood losses through risk-based insurance pricing and conditions.