Insurance now available to those in high-risk flood zones

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This article was published 07/01/2019 (2499 days ago), so information in it may no longer be current.

Manitoba homeowners in high-risk flood zones can obtain flood coverage for the first time, thanks to a new insurance plan unveiled by the Co-operators this week.

The program, called Comprehensive Water, allows coverage for every type of risk from every type of flood: overland flooding from lakes or rivers, sewer backups and flooding from extreme precipitation events.

Up until 2015, Canada was the only G7 nation that didn’t have flood insurance. Private flood coverage started being offered in Canada that year and reached Manitoba in 2016.

But none of the coverages included high-risk areas where people need it most, such as some areas along rivers and lakes, said Tara Laidman, flood-initiative director with the Co-operators.

“Part of (the new program) goes back to our co-operative principles,” Laidman said. “It doesn’t feel right not to offer a product to everyone. We offer the program to people who truly, truly need it.”

Many Manitobans may wonder why they should get flood insurance when governments have given financial bailouts to flood victims in the past.

But governments are trying to get out of flood compensation and have told private insurers it wants them to take it over.

“Governments across Canada are starting to talk to insurance companies and the Insurance Bureau of Canada, and are saying, as more insurance companies step into the market, we’re going to be stepping away from this,” Laidman said.

“If you think about it, when a wildfire happens, people rely on their insurance company, they don’t rely on the government for that,” she said.

Neither does government provide enough compensation for people to get back on their feet the way insurance policy can, she said.

The Co-operators started flood protection in Alberta in 2015, which was hard-hit by flooding that year, and moved into Ontario in 2016 because it is the most populated province. Manitoba is the last province to receive the Co-operators flood protection along with Quebec, because of the complexity of its flooding. “We needed to make sure we got (its flood modelling) right,” Laidman said.

Even if you don’t live near a lake or river, you can still be flooded by an extreme precipitation event. “In my opinion, it’s coverage everyone in Manitoba needs,” Laidman said. “Especially recently, we’ve had a lot of really heavy rains, and as soon as we have that heavy rain, the ground can’t absorb it quickly enough and we see pooling and it gets into homes.”

About 50 per cent of Manitobans live in areas with risk of overland flooding ranging from high to low, the Co-operators say. Others are still at risk from flooding from things such as extreme rain events. Floods have replaced fire as the costliest damage to homes.

People can get an online assessment of their home’s flood risk by plugging their address into the company’s website at water.cooperators.ca. The assessment will be based on individual geocodes (street-level GPS co-ordinates). It will assess both overland flooding and sewer-backup risk.

A more detailed assessment can be obtained from a Co-operators adviser. Co-operators insurance is not sold through regular insurance brokers.

Laidman said protections such as the Red River Floodway greatly reduces the exposure to flooding and therefore makes insurance “relatively affordable.” The average cost of the program’s flood coverage is about $30 per month, but there are many variables. People in high-risk areas would pay more.

“We don’t want to subsidize clients who are living close to a river (with premiums from clients at lower risk),” Laidman said.

“(Flood insurance) is getting more prevalent,” said Cheryl Gemmell, office manager with Rempel Insurance in the town of Morris. However, while more people are obtaining flood coverage since it was introduced in 2016, some people are being rejected because their risk is too high, she said.

The Co-operators program coverage is for dwellings only and wouldn’t apply to pastures, such as those around Lake Manitoba that were flooded in 2011 when water was diverted from the Assiniboine River via the Portage Diversion into Lake Manitoba. Neither does the program cover recreational properties such as cottages, but that is being studied this year, Laidman said.

bill.redekop@freepress.mb.ca