When a wildfire burned Jo-Anne Beharrell’s property in 2021, she was one of the only residents in her community near Kamloops, British Columbia, who had home insurance.
Insurance is expensive in the Beharrell area, in part because of how far he lives from fire hydrants or firefighters. According to Natural Resources Canada, the region is also at particularly high risk of wildfires due to its dry climate. And it is expected to be more expensive.
The cost of mortgage and home insurance is rising in Canada, in part due to climate change. Experts say that for some residents in areas with high risk of flooding and fires, the cost of insurance is too high to bear. Beharrell already said the cost of insurance has increased too much for his neighbors.
“It’s hard to get insurance. And then when you get it, it’s very expensive,” Beharrell said. “Many people here are uninsured simply because the premiums for insurance here are so high.”
Before the wildfire, Beharrell paid about $2,900 a year to insure his land. After the fire, her premiums increased to approximately $3,400.
That’s about double the average cost of home insurance in the province. according to InsureBCwhich according to the insurance broker ranges between approximately $1,200 and $1,700.
Insurance Bureau of Canada spokesperson Rob de Pruis said there is little comprehensive data on the true cost of home insurance across Canada. However, mortgage brokers like Ratehub.ca and insurance brokers like InsureBC offer quotes for the average cost of home insurance in each province, excluding the territories.
In an email to Canadian National ObserverPruis said these quotes only represent a small part of the insurance industry. He added that other factors such as the cost of a home, jewelry limits and the likelihood of floods and earthquakes can cause the cost of coverage to “vary significantly.”
Extreme weather is contributing to an increase in insurance premiums, which can affect the price for people in frequent fire and flood zones.
“Unfortunately we do not have data on home insurance premiums. This is not captured for the entire industry from any organization,” he said in the email.
However, there is no doubt that costs are increasing. Statistics Canada Data shows that between 2019 and 2023, the cost of mortgage and home insurance across Canada increased by approximately 28 per cent.
Severe weather is one of several factors that increase the cost of insurance, de Pruis said in an interview.
“We are seeing an alarming trend of increasing frequency and severity of severe weather,” he said. “We know that severe weather is increasing, so those risk factors are increasing, as are overall claims costs.”
Extreme weather conditions, such as fires and floods, are expected to occur more frequently with climate change. In 2021 and 2022, the insurable cost of damage caused by extreme weather events soared to about $2 billion. Last year, that cost rose again to more than $3 billion. According to the insurance office, most of these payments are due to water damage.
Climate change is not solely responsible for the rising cost of claims, de Pruis said. Inflation and the rising cost of home repair are also contributing factors.
Back in BC, Beharrell still sees remnants of the fire.
“When I look out the window, all I can see is this whole hillside of burned, dead, standing trees,” he said. “Out the other window, it looks nice. There is regrowth. “It is our land that we have cleaned up and hopefully we can bring some beauty back to it.”
The rising cost of insurance means some Canadians can no longer afford to be covered. Mathieu Boudreault, an insurance and climate change researcher at the Université du Québec à Montréal, said Canadians could be forced to not insure their homes against overland flooding.
“Those known to live in floodplains would not be able to find insurance,” Boudreault said. “And if insurance was offered, it wouldn’t be affordable. “We’re talking thousands of dollars every year.”
He estimated that between three and five percent of homeowners (those facing the highest risk of flooding) are paying “very high” premiums to cover their homes, amounting to several thousand dollars a year.
Boudreault said climate change will likely increase the future cost of insurance in Canada.
“I hope I’m wrong, but this could just be the tip of the iceberg,” Boudreault said. “In the coming years and decades, insurability might become a little more difficult or premiums might increase and some people might not be able to afford their insurance.”
Back in British Columbia, Beharrell said she and her husband will continue to take responsibility.
“I’m not convinced that we are 100 percent in a safe space just because of the way the mountains and the forest are managed,” she said. “I’m going to continue with that big bill until I feel more confident.”