After a year in which it paid nearly $1 billion in claims in Ontario and $1.7 billion in Alberta because of natural disasters, the insurance industry is testing out a new tool that will help identify where municipalities might direct their money so future flooding does not do as much damage.
The Insurance Bureau of Canada, which represents property insurers across Canada, has been dealing with worsening weather events for more than a decade, according to Bill Adams, IBC vice-president for the Western and Pacific region.
There's been a 12% increase in the amount of rain in Canada since 1950, and extreme weather events that happened every 40 years in the past now occur every six years, both factors that have helped drive up insurance claims.
It used to be the greatest risk to your home was fire. Now, it's water. The three factors driving up your insurance premiums are climate change, aging municipal sewers and storm sewers, and the trend of putting a "man cave" with an expensive entertainment system in the basement — where it is liable to get damaged during extreme weather events.
Adams calls the problem of predicting extreme weather an "actuary's nightmare." Already this year, Manitoba and Alberta have seen flooding, and Ontario has been hit by a tornado.
One problem is the intensity of the rain in what might otherwise be an ordinary storm – for example, if 100 mm of rain falls in six hours rather than over 48 hours, he said.
That overwhelms municipal storm sewer systems, many of them not upgraded since the beginning of the last century.
Storm sewers overflow and back up, and the next thing you know, basements are flooding and someone's hardwood floor and big screen TV has to be replaced.
The Federation of Canadian Municipalities has estimated the deficit in spending on municipal infrastructure in Canada at $55 billion and has lobbied both federal and provincial governments to contribute more.
The IBC has supported that lobby effort, but it wanted to do more, Adams said.
Which is why the IBC is testing out a system called Municipal Risk Assessment Tool (MRAT) that will identify the streets that will be hardest hit in a storm. Created with the help of engineers and geologists, it combines information about the age and condition of municipal infrastructure, current and future climate, soil quality and past insurance claims.
Three cities —? Coquitlam, B.C., Hamilton, Ont., and Fredericton, N.B. — are participating in a pilot with the tool this year. The idea is to test whether MRAT – essentially, a series of maps that highlight areas where basement flooding is most likely — is effective in giving city engineers a new picture of where infrastructure is vulnerable today and where it will be vulnerable in 2020 and in 2050.
That won't change the fact that municipalities are strapped for cash in attempting to fund repairs and upgrade their aging storm water sewers. Nor will it make spending on sewers — already not the sexiest issue in political circles — any more attractive in a municipal election year.
But it might make a difference in how cities allocate funding for the following year's budget, Adams said.
