January cold snap resulted in $180 million of insurance claims in Western Canada

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After one excessive climate occasion in Alberta within the first weeks of 2024, Canadian insurers expect “extraordinarily regarding” climate situations this summer time because the province braces for worsening drought and a probably extreme wildfire season.

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The Insurance coverage Bureau of Canada already estimates about $180 million in damages have been incurred in the course of the mid-January chilly snap that hit swaths of Western Canada. The vast majority of insurable damages got here from British Columbians, with Albertans claiming about $30 million between Jan. 12 to fifteen.

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The majority of these claims have been for property harm, particularly burst pipes, in the course of the stretch that noticed temperatures close to -40 C in Calgary and -50 C in Edmonton.

Alberta properties are constructed to resist excessive lows higher than its westerly neighbours on account of completely different constructing codes, mentioned Rob de Pruis, IBC’s nationwide director of shopper and business relations. B.C. properties could not have the identical insulation and heating gear, he mentioned, making pipes extra vulnerable to bursting throughout chilly snaps.

The deep freeze was the primary main climate occasion to hit Canada this yr, and the IBC expects a number of extra within the approaching months.

Albertans alone claimed $330 million in 2023 on account of extreme climate, contributing to Canada’s $3.1 billion in weather-related claims — the fourth highest since IBC started accumulating information in 1982.

“Final yr throughout Canada, we had extra catastrophic insurance coverage occasions in a single specific yr than we’ve had some other yr in our nation’s historical past,” de Pruis mentioned.

Insurable claims have been monitoring increased for many years, de Pruis mentioned.

Hailstorms, tornados pose excessive dangers in summer time

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Based on IBC, Canada’s insurance coverage business was paying out a median of $450 million every year within the Eighties and Nineties. That quantity rose to about $675 million within the 2000s and has averaged about $2 billion over the previous decade, de Pruis mentioned, which he referred to as “extraordinarily regarding.” (All figures are adjusted for inflation.)

“We’re not local weather scientists, however we do know that the frequency and severity of all these occasions has been rising,” de Pruis mentioned.

Hailstorms and tornadoes pose excessive dangers to Albertans in the course of the summer time months. Whereas wildfires additionally pose a danger, they traditionally make up a small portion of all severe-weather claims yearly, except for excessive instances. (The 2016 Fort McMurray wildfire resulted in upwards of $5 billion in claims, in line with IBC.)

The July 18, 2023, hailstorm and twister that tore by way of Drugs Hat resulted in additional than $100 million in damages — almost a 3rd of all severe-weather claims in Alberta for the yr.

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In the meantime, Alberta has the second-highest auto insurance coverage premiums within the nation, in line with the Alberta Vehicle Insurance coverage Charge Board’s 2023 mid-year report.

Alberta Finance Minister Nate Horner, talking final week to Calgary’s enterprise neighborhood, mentioned the province has commissioned a report on its auto insurance coverage business. He mentioned the province expects to obtain that report someday this week and that session on future modifications will seemingly start within the spring.

“There was a research finished earlier in our time period, however Premier (Danielle) Smith felt it was too slim in focus and didn’t contemplate completely all the things,” Horner mentioned. “This research does.”

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