Flood insurance now available to 94% of Canadian homes
Canadians have far greater access to overland flood insurance today than they did just a decade ago, according to a new report from Insurance Bureau of Canada (IBC).
The report: “The State of the Flood Insurance Market in Canada” finds that approximately 94% of residential properties across Canada are now eligible for overland flood insurance.1 The remaining 6% that are ineligible tend to be in areas at high risk of flooding, where coverage may be unavailable or unaffordable. Meanwhile, the amount of households in Canada with flood insurance increased from 26% in 2017 to 71% in 2023, and 88% of overland flood policies now cost $300 or less annually.
“Just over a decade ago, overland flood insurance was largely unavailable to many Canadians,” said Liam McGuinty, Vice-President, Federal Affairs, IBC. “Today more than 30 insurers offer some form of overland flood coverage in Canada, and more than 7 in 10 homeowners purchase it. The growth of the market demonstrates how innovation, competition and better risk assessment have substantially expanded consumer access to flood protection.”
IBC attributes the market’s growth to major investments in flood mapping, catastrophe modelling, geospatial analytics and property-level risk assessment. These investments have enabled insurers to understand and price flood risk more precisely, allowing them to offer coverage to many properties that previously had been considered uninsurable.
As insurers have improved their ability to assess and price flood risk, the number of homes unable to access overland flood insurance has fallen nearly 45% over the past seven years, from approximately 1.5 million homes to roughly 850,000. The report also finds that Canada’s flood risk is increasingly concentrated, with approximately 2% of all residential properties accounting for more than half of the country’s potential flood losses.
“The findings suggest that Canada’s flood challenge is increasingly a risk-reduction challenge, not an access-to-insurance challenge,” said McGuinty. “Private insurers have expanded coverage to the vast majority of Canadian households. The next step is reducing the underlying risks facing communities by implementing better land-use planning, more resilient infrastructure and targeted solutions for the small number of properties facing the highest levels of flood risk.”
The report argues that maintaining affordable insurance coverage in a changing climate will increasingly depend on reducing the underlying risks facing Canadian communities. To that end, IBC is calling on governments to:
Strengthen land-use planning policies to discourage development in high-risk areas;
Invest in resilient public infrastructure;
Improve the flood maps and flood-risk information available to governments, businesses and consumers, including provincial governments participating in Canada’s Flood Risk Finder tool;
Support household-level flood mitigation measures through targeted retrofit programs; and
Develop targeted solutions for the small number of properties facing the highest levels of flood risk, including strategic buyout programs.
IBC reminds policyholders that flood insurance coverage, eligibility and pricing vary by insurer and policy terms. Consumers should review their policy wording and speak with their insurance representative to better understand the protection available to them.
1 IBC, 2024 Flood Survey.
About the Flood Survey
IBC’s 2024 Flood Survey is a cross-sectional survey, used in conjunction with data from prior flood surveys for trend analysis. Information on policy take-up, pricing and eligibility were collected from survey respondents that represent nearly 70% of the personal property insurance market in Canada based on revenue. Figures have been scaled up to estimate full market participation. Data was collected based on coverage level across all provinces for all housing categories (single family residence, condominium, tenant and cottages/seasonal homes).
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