Insurance Bureau of Canada (IBC) and the Insurance Brokers Association of Canada (IBAC) are combining efforts to help Canadians better understand how natural catastrophes could affect their home and property. As a first step, the associations are collaborating to develop enhanced training on natural catastrophes for insurance brokers and agents.
The training is being designed to provide brokers and agents with guidance on how to help consumers better understand property risk, how policy coverages address that risk, and how homeowners may reduce that risk through landscaping, building retrofits, and other means. It will also eventually include training on risk awareness tools, once they are fully developed.
Recent studies have shown that homeowners are frequently unaware of the hazards that they face and their exposure may be growing. In 2023, for the second year in a row, Canada exceeded $3 billion in insured damage from natural catastrophes and severe weather events.
Furthermore, according to a 2022 survey of over 5,000 Canadians commissioned by IBC, between one-third to half of home insurance policy holders are unaware of whether their home insurance policy has the coverage they need to recover from various natural disasters.
“The frequency and severity of natural catastrophes is worsening, and should be a concern for all Canadians, especially homeowners and tenants,” said Celyeste Power, President and CEO, Insurance Bureau of Canada. “As a result of this training, insurance representatives will be better positioned to help insured Canadians understand their risk exposure to natural catastrophes, enabling them to make informed decisions about safeguarding their homes and other cherished belongings.”
“Brokers across the country play a key role in their communities by educating consumers on their property specific risk, and by providing them with professional advice on how best to protect their assets in the event of a natural catastrophe. Through this combined effort we aim to leverage the industry’s existing capability and lead the development of additional tools, to better inform and support Canadians in responding to this changing environment,” said Peter Braid, CEO, Insurance Brokers Association of Canada.
In a future phase, the insurance industry will work with governments to explore the development and deployment of tools to support property risk conversations at the point of sale and renewal of insurance coverage. IBC and IBAC are also working to develop easier-to-understand language to outline coverage options and consumer choices and are exploring ways to engage other relevant stakeholders to help assist Canadians on increasing their awareness of a property’s potential exposure to natural catastrophic risk prior to making a purchasing decision.
In early 2023, the Canadian Council of Insurance Regulators (CCIR) and the Canadian Insurance Services Regulatory Organization (CISRO) engaged IBC and IBAC for feedback on a position paper focused on improving consumer awareness of climate risks facing Canadian households. That report was released in April 2023 and these efforts will help address the challenges identified.
The insurance industry continues to work with all orders of government to implement the National Adaptation Strategy released in June 2023. A keystone adaptation measure is the operationalization of a national flood insurance program which will launch in spring 2025 and will help addressCanada’s growing flood protection gap by providing Canadians living in high-risk areas with affordable flood insurance.
