Insurers making good progress supporting customers with claims and helping residents recover
The tally for Calgary’s record-breaking hailstorm last August continues to rise, with total insured losses now estimated to be $3.25 billion, according to Catastrophe Indices and Quantification Inc. (CatIQ). The storm is the second-costliest disaster in Canadian history for insured losses and resulted in more than 130,000 insurance claims.
Despite the enormous volume of claims that resulted from the hailstorm, Insurance Bureau of Canada (IBC) reports that over the past six months, insurers have made good progress helping affected residents recover and rebuild following the disaster.
The majority of auto insurance claims – which represent more than half of all claims from the hailstorm – have been completed. Alberta’s insurers brought in adjusters from across the province to help expedite vehicle assessments and repairs.
Total insured damage to vehicles is now estimated to be nearly $1 billion. The damage was so extensive that roughly half of all vehicles damaged were total losses, meaning that the value of the vehicle was written off and customers opted for cash payouts in lieu of repairs.
Nearly 60,000 homes in the Calgary area were impacted. The availability of building supplies and repair contractor services in Calgary has been strained by the scale of the damage; however, insurers will continue to work with their customers until all repairs are completed. The vast majority of repairs are expected to be complete this spring and summer.
“Impacted customers have seen progress on their insurance claims following last summer’s hailstorm, but there’s still a lot of work to do as repairing damaged homes and businesses on a scale this large will take time,” said Aaron Sutherland, Vice-President, Pacific and Western, IBC. “The people of Calgary have shown tremendous resilience, and Alberta’s insurers will continue to match that spirit and support their customers every step of the way.”
The August 5 hailstorm primarily affected northern parts of the city of Calgary, and a new report from Aon, a global risk-modelling firm, highlights the growing risk of hail events facing the area. The report notes that areas of the city have seen “staggering urban development in recent decades,” including new residential neighbourhoods, as well as new commercial and industrial properties, like the Calgary International Airport. An analysis of the hailstorm footprint shows that if this hailstorm had occurred 40 years ago, it would have affected mostly agricultural land. In June 2020, the same area of north Calgary was hit by a hailstorm that resulted in $1.2 billion in insured losses.
Last summer was the most expensive one on record in Canada for catastrophic weather events, with 228,000 insurance claims and over $8 billion in insured damage. Half of this damage – $4.1 billion – occurred in Alberta alone, placing pressure on insurance premiums here and across the country. These events are important reminders of the need to increase investments in resilience and other measures to better protect communities from severe weather.
Canada’s insurers have been calling on governments to invest in disaster resilience measures for over a decade. That means improving building codes to mandate the use of weather-resistant materials – like hail-resistant roofing and siding – in areas of highest risk. It also means helping homeowners understand the risks they face and financing retrofits to help them reduce those risks, all while investing in improving emergency preparedness, emergency response and disaster recovery.
“We are seeing more of these events, in both frequency and severity,” said Sutherland. “When homeowners repair or replace roofing, there are impact resistant products available that can help reduce or eliminate the chance of future loss or damage from another hailstorm.”
