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Insurance industry tools up for climate change

Hit with rising claims from catastrophic storms, the sector reassesses risk to cities
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Waterfront Village Centre, a Beedie development in Coquitlam, will be built higher and farther back from the Fraser River to address concerns about rising water levels

Water damage caused by system backups has now surpassed home fires as the most costly type of insurance claim in the country, according to the Insurance Bureau of Canada. 

Insurable losses related to water and wind damage in 2013 were more than 40 times the amount recorded in 1983, according to bureau data. Last year, insurable losses surpassed the $3 billion mark for the first time in Canadian history, and more than half of those claims, $1.7 billion, were related to water damage.

“What we are seeing is, every year, billions of dollars in catastrophic losses,” said Robert Tremblay, the insurance bureau's director of research. “An extreme weather event that would occur every 50 years is now happening once every five to seven years, depending on where you are in the country,” he said. 

British Columbia has largely escaped major losses associated with severe weather events. The rainy West Coast, in particular, has spared many of its residents from water damage on the levels seen elsewhere because urban drainage systems were built from the outset to withstand a higher level of rain intensity.

But, cautioned Tremblay, no one is immune from the effects of climate change. “If it rained more in the past, it is going to rain more in the future,” Tremblay said. 

Policy-makers across the Metro Vancouver region have been working in recent years to lower the risk of overland flooding by beefing up regulations for waterfront developments. Policy changes in Coquitlam, for instance, now require the Waterfront Village Centre, a large development planned by Beedie Development on the former Fraser Mills site, to be built up about one metre higher than the previous municipal standard, bringing it to about six metres.

The development will also be set back sufficiently from the river to allow a dike to be built in the event of an historic flood. 

To ascertain what climate change coverage will be needed, the insurance bureau has developed an innovative software program specifically designed to help cities better plan for and guard against flooding caused by severe weather. 

The Municipal Risk Assessment Tool (MRAT), which is still being fine-tuned, is currently being tested in three pilot cities, including Coquitlam, Hamilton, Ontario, and Fredericton, New Brunswick. The initiative, developed by the insurance bureau with the aid of federal funding, uses different climate models, past rainfall events and municipal data to predict areas of the city that are particularly vulnerable to flooding caused by storm-related backups. The data can be used by cities to make necessary improvements before problems occur.

Tremblay called the MRAT the “most advanced analytical tool of its kind.”

Engineer Dana Soong is the MRAT technical expert in Coquitlam, where sewer backups are common, resulting in dozens of complaints every year in the fast-growing city of 126,000.

“What climate change is doing is giving us more extreme storms, more extreme rainfall events,” Soong said, adding, “This tool [MRAT] will help us.”  •