Western Canada deep freeze causes over $180 million in insured damage

First natural catastrophe of 2024 highlights growing cost pressures facing insurance premiums

Toronto, ON (Mar. 11, 2024) – A deep freeze in Western Canada in January is estimated to have caused over $180 million in insured damage, according to initial estimates from Catastrophe Indices and Quantification Inc. (CatIQ).

“It’s been an unusual winter season, with extreme swings in conditions across the country,” said Rob de Pruis, National Director, Consumer and Industry Relations, IBC. “In January, British Columbia, Alberta and Saskatchewan experienced an extreme cold weather event that led to widespread water damage caused by frozen and burst pipes. Based on total claims counts, approximately 70% of all claims related to this extreme cold event were personal property claims.”

Much of Western Canada started 2024 with unseasonably mild temperatures; however, on January 12, daytime highs dipped sharply to well below the seasonable normal and persisted for several days. Environment Canada reported dozens of new daily minimum temperature records were set. Edmonton saw four straight days with temperatures between -40 to -45 degrees Celsius.

IBC reminds residents that an insurance policy does not change in winter, or with specific temperatures. Instead, insurance covers various perils outlined in your policy. That means that rather than having ‘winter’ or ‘cold temperature’ coverage, your policy will outline perils that may occur as a result of these temperatures (i.e.: damage caused by freezing).

Perils like water damage from burst pipes, wind, hail or fire are typically covered in standard home insurance policies. There are limitations to this coverage if you are away from your home during the usual heating season. This may require someone check on your home every day or every other day, while you are away to ensure the heat is maintained and minimize potential damage by detecting it early. Check with your insurance representative to ensure you understand the requirements to maintain coverage for damage from frozen pipes while you are away on a winter vacation.

“As the frequency and severity of weather events continue to increase in Western Canada, so too do the financial costs borne by insurers and taxpayers. We all must do better to protect ourselves from loss or damage resulting from natural disasters, which continue to have an outsized impact on the most vulnerable,” added de Pruis. “Anyone who has been affected by this extreme cold event and/or has questions about their home, vehicle or business insurance, should call their insurance representative. Insurance representatives are on your side and there to help. Anyone with general insurance questions can also contact IBC’s Consumer Information Centre at 1-844-2ask-IBC or visit IBC.ca.”

For more information on the damages covered by a standard home, auto or businesses insurance policy in the event of extreme cold, residents can refer to IBC’s recent IN Focus article.

As reported by IBC earlier this year, severe weather in 2023 caused over $3.1 billion in insured damage across Canada. IBC is continuing to engage with the federal and provincial governments on ways to improve the climate resilience of communities across the country. Insured losses related to severe weather in Canada now routinely exceed $2 billion annually. By comparison, between 2001 and 2010, Canadian insurers averaged $675 million a year in losses related to severe weather.

The amount of insured damage is an estimate provided by CatIQ under license to IBC.

About Catastrophe Indices and Quantification Inc.

Toronto-based CatIQ is a subsidiary of Zurich-based PERILS AG and delivers detailed analytical and meteorological information on Canadian natural and human-made catastrophes.

Through its online subscription-based platform, CatIQ combines comprehensive insured loss and exposure indices and other related information to better serve the needs of insurance/reinsurance/ILS industries, the public sector and other stakeholders.

CatIQ was established in 2014 with the support of the overwhelming majority of the Canadian insurance and reinsurance industry and is widely recognized as the most reliable source of catastrophe loss information in Canada. For more information, please visit catiq.com.

About Insurance Bureau of Canada

Established in 1964, Insurance Bureau of Canada (IBC) is the national industry association representing Canada’s private home, auto and business insurers. Its member companies make up the vast majority of Canada’s highly competitive property and casualty (P&C) insurance market. As the leading advocate for Canada’s private P&C insurers, IBC collaborates with governments, regulators and stakeholders to support a competitive environment for the P&C insurance industry to continue to help protect Canadians from the risks of today and tomorrow. IBC believes that Canadians value and deserve a responsive and resilient private P&C insurance industry that provides insurance solutions to both individuals and businesses. For more information, visit www.ibc.ca. If you have a question about home, auto or business insurance, contact IBC’s Consumer Information Centre at 1-844-2ask-IBC.

Source: Insurance Bureau of Canada (IBC)

Tags: CatIQ, Insurance Bureau of Canada (IBC), Natural Catastrophes, severe weather