As water levels and average temperatures rise, so do concerns over insurance coverage for Greater Victoria homeowners amid a larger problem in the province B次元官网网址� climate change-fuelled disasters.

In May 2022, 34-year-old Mica Munro and 32-year-old Jasper Smith bought a $1-million house in Saanich and purchased home insurance that included earthquake coverage.

B次元官网网址淲e decided to go in with all the bells and whistles,B次元官网网址� Munro told Black Press Media.

The following year, the pair decided to opt-out of paying for earthquake insurance, which almost cut their home insurance expenses in half. Although Munro and Smith were able to save a chunk of change, that hasnB次元官网网址檛 stopped them and homeowners alike from worrying about the impacts climate change might have on their house.

B次元官网网址淭hat probably put us at a bit of an anomaly for a lot of people, especially because most people are pretty risk-averse and considering weB次元官网网址檙e on a fault line, but we just decided to roll the dice,B次元官网网址� said Munro.

A survey from released on June 29, 2023 found that 35 per cent of Canadian homeowners considered the potential risks of climate-induced weather patterns when buying a home. That consideration rose to 64 per cent among homeowners between ages 18 and 34 years old.

In 2023, natural disasters and severe weather caused more than $3 billion in insured damages in Canada for the second year in a row. The Insurance Bureau of CanadaB次元官网网址檚 annual tally places last year as fourth on the bureauB次元官网网址檚 list of the most expensive weather years - a list that is still topped by the Fort McMurray wildfire in 2016.

Wildfires are an expensive force to be reckoned with, insurance data shows. The Okanagan and Shuswap fires last August and September cost $720 million, making them the most expensive insured event ever recorded in the province.

While Vancouver Island doesnB次元官网网址檛 have the OkanaganB次元官网网址檚 hot and dry climate, it still had its fair share of wildfires last summer. The Muir Creek wildfire north of Shirley grew out-of-control, according to the B.C. Wildfire Service. Closer to home, a fire broke out on the Malahat during a multi-day record-breaking hot streak.

READ MORE:

READ MORE:

READ MORE:

Buying climate disaster insurance is recommended

Climate change isnB次元官网网址檛 a direct cause of earthquakes but can still trigger B次元官网网址渟low earthquakes,B次元官网网址� according to . Major storms including hurricanes can also create atmospheric pressure and spark a quake.

Like many, Munro and Smith are weighing out the risks and costs.

B次元官网网址淚t definitely plays a part in making decisions for our home insurance recognizing home insurance companies will also be taking that into account with the way that they charge rates,B次元官网网址� Munro said.

Matt Marcoux, a masterB次元官网网址檚 student at the University of Victoria, is studying the impacts of climate change on home insurance.

Marcoux, who has a background working in insurance, found that a deductible for earthquake insurance is usually around 10 per cent of the cost of a home. In Greater Victoria, this translates into about a $100,000 of the $1-million benchmark. Munro and SmithB次元官网网址檚 deductible was $75,000 when they had earthquake insurance. That year the pair paid $3,100 for insurance but after opting out of earthquake insurance the following year, the couple only paid $1,600.

Although earthquake insurance in Greater Victoria is costly, Marcoux said B次元官网网址渋tB次元官网网址檚 still 100 per cent a good idea to buy earthquake insurance,B次元官网网址� going so far to suggest that its the more-expensive coverage people should consider buying.

B次元官网网址�The type of insurance that people should buy is for losses that they cannot recover from,B次元官网网址� said Marcoux. B次元官网网址淏rokers may try to up-sell things like jewelry coverage on a wedding ring, and although thatB次元官网网址檚 inexpensive, I would say that kind of insurance is of very little value. So, the price of insurance coverage is directly proportional to the risk of that coverage.B次元官网网址�

Stephanie Lumley is thankful she had insurance after a 120-foot tree crashed down through the roof of her Sooke home during a wild windstorm in January. Lumley said she got lucky because the tree didnB次元官网网址檛 hit any structural beams, but the estimated cost of the repairs was $25,000 and could still increase.

B次元官网网址淓very year you hear about peopleB次元官网网址檚 houses either going up in smoke or getting damaged, and they didnB次元官网网址檛 have insurance,B次元官网网址� Lumley said. B次元官网网址淚 just want to make an example for the community that if we hadnB次元官网网址檛 got insurance and got the bill in right now, the cost would keep going up and that would wipe us out.B次元官网网址�

As the homeowner is close to the ocean, sheB次元官网网址檚 worried about the impact weather events could continue to have on her home.

B次元官网网址淭here seems to be more and more damage with the storms and of course climate change.B次元官网网址�

READ MORE:

Good news for insurers and homeowners

Insurance companies now have reinsurance so they donB次元官网网址檛 go bankrupt after having to pay out large natural disaster premiums.

Marcoux explained that the 1994 Northridge Earthquake on the San Andreas Fault was a B次元官网网址渂ig wake-up call to the industry.B次元官网网址� The event marked the most expensive premium payout by insurance companies for earthquake damage.

International insurance companies providing reinsurance to local insurers are banking on only one area around the world having a natural disaster at a time.

B次元官网网址淎s long as a large earthquake happens on the west coast and not across the world at the same time, these companies arenB次元官网网址檛 going to go bankrupt,B次元官网网址� said Marcoux.

Subscription policies also help local companies provide insurance for large weather events. Marcoux explained that on an insurance contract, there will be an insurance company as a lead insurer, but a multitude of other insurers will take up a portion of the risk.

While there is good news for the financial security of insurance companies, homeowners can also rejoice as Marcoux reported they can expect more money in their pockets. Marcoux said homeowners can suspect insurance rates to see a drop because the industry is currently shifting from a market where coverage is expensive and hard to find, to one thatB次元官网网址檚 cheaper and readily available.

-With files from the Canadian Press

READ MORE: