Crews work on cleaning up the destruction left behind by Hurricane Fiona in Port Aux Basques, Newfoundland on Sept. 27, 2022.JOHN MORRIS/Reuters
Insurance payouts from Hurricane Fiona will be the highest of any extreme weather event to hit Atlantic Canada, according to an early estimate from Catastrophe Indices and Quantification Inc. released Wednesday.
CatIQ, a Toronto-based firm which provides analysis of catastrophic losses, estimated that insurers will pay out $660-million. That makes Fiona one of the 10 most expensive disasters for the industry in Canadian history, surpassing the 2011 Slave Lake wildfire.
Amanda Dean, the Insurance Bureau of Canada’s vice-president for the Atlantic region, said what set Fiona apart was the sprawling geography it pummelled. “There was damage to all four Atlantic provinces plus Îles-de-la-Madeleine, which belongs to Quebec,” she said.
More than half of those damages ($385-million) occurred in Nova Scotia, parts of which suffered severe flooding, and where roads washed out, trees fell on cars and roofs were shorn off. The damage was concentrated in a swath from Pictou County to Cape Breton Island.
Another $220-million originated in Prince Edward Island, where storm surge knocked houses off their foundations. Lesser damages were estimated for New Brunswick ($30-million), Quebec ($11-million) and Newfoundland ($7-million), the latter of which lost at least 20 homes to the ocean.
“There were an awful lot of wind claims, car claims as well, and businesses that were damaged due to something falling on the roof, the roof blowing off, trees piercing the structure,” Ms. Dean said.
But the worst financial hit has yet to be tallied. Ms. Dean said much of Fiona-related losses were caused by storm surge, a peril for which insurance is not widely available. Much of the storm damage also occurred in areas deemed by insurers to be high-risk, which normally results in expensive premiums or an inability to purchase insurance.
“It’s going to be one of those events where there’s an awful lot of government assistance,” she said.
Top 10 natural disasters for
insurance payouts in Canada
In billions of dollars
Rank
Disaster
Year
Payout
$4
Ft. McMurray wildfires
2016
Eastern ice storm
1998
2.3
Southern Alta. floods
2013
1.8
Alberta hail storm
2020
1.2
Toronto flood
2013
1.0
Ont./Que. wind storm
2022
.875
Toronto flood
2005
.780
Eight of the costliest
disasters in history
have happened
since 2013
Ontario wind storm
2018
.695
B.C. flood
2021
.675
Hurricane Fiona
2022
.660
the globe and mail, Source: Insurance
Bureau of Canada
Top 10 natural disasters for
insurance payouts in Canada
In billions of dollars
Rank
Disaster
Year
Payout
$4
Ft. McMurray wildfires
2016
Eastern ice storm
1998
2.3
Southern Alta. floods
2013
1.8
Alberta hail storm
2020
1.2
Toronto flood
2013
1.0
Ont./Que. wind storm
2022
.875
Toronto flood
2005
.780
Eight of the costliest
disasters in history
have happened
since 2013
Ontario wind storm
2018
.695
B.C. flood
2021
.675
Hurricane Fiona
2022
.660
the globe and mail, Source: Insurance
Bureau of Canada
Top 10 natural disasters for insurance payouts in Canada
In billions of dollars
Rank
Disaster
Year
Payout
$4
Fort McMurray wildfires
2016
Eastern ice storm
1998
2.3
Southern Alta. floods
2013
1.8
Alberta hail storm
2020
1.2
Toronto flood
2013
1.0
Ont./Que. wind storm
2022
.875
Toronto flood
2005
.780
Eight of the costliest
disasters in history
have happened
since 2013
Ontario wind storm
2018
.695
B.C. flood
2021
.675
Hurricane Fiona
2022
.660
the globe and mail, Source: Insurance Bureau of Canada
The Disaster Financial Assistance Arrangements, a cost-sharing arrangement between the federal government and the provinces that reimburses provinces for certain damages stemming from catastrophes, is likely to pay out far more than the insurance industry. According to Public Safety Canada, the DFAA has already received official requests for assistance from the governments of Nova Scotia, PEI and Newfoundland and Labrador. But no province has yet provided an official estimate of their costs for response and recovery.
This month, Prime Minister Justin Trudeau announced a Hurricane Fiona Recovery Fund, which will provide $300-million over two years. Those funds are intended to help pay for costs not covered by the DFAA and other federal programs.
Fiona’s financial fallout is just the latest indication that the repair bill from weather-related disasters has skyrocketed above historical norms. Insured losses from severe weather have more than quadrupled since 2008, according to the Insurance Bureau, and the annual total has reached $2-billion. The DFAA has paid out more than $6-billion to provinces and territories since its establishment in 1970, but more than 62 per cent of that was paid out in the past decade. And that doesn’t include the estimated $5-billion in payments expected from last year’s atmospheric river event in British Columbia.
In August, the Task Force on Flood Insurance and Relocation issued its final report to the federal government after 18 months of research. It found that Canada’s exposure to flood damage is growing as a result of climate change, coupled with a concentration of assets – and increased development of homes and infrastructure – in areas prone to flooding. The task force explored a range of possible insurance and relocation schemes but didn’t recommend any of them.
“This was done because all of the explored models offer specific trade-offs and compromises,” its report noted.