The impacts of climate change are being felt all over the world, including right here at home in southern Ontario.
In Haldimand and Niagara, we have been experiencing hotter summers (1), less ice formation on the Great Lakes (2), and more extreme weather like tornados (3).
This can all have a significant impact on home insurance.
Here’s how:
HIGHER HOME INSURANCE PREMIUMS
Rising global temperatures (including the average of 1.4 Celsius increase in the air temperature in the Niagara Region) lead to more intense storms and extreme rainfall events which increases the risk of property damage.
This increased risk for homeowners also puts extra pressure on insurers.
As insurance companies face growing claims costs, their forced response has been to increase premiums or reduce coverage in certain high-risk areas.
MORE RESTRICTIVE HOME INSURANCE COVERAGE
In certain areas of increased risk, sometimes it’s simply not worth it for home insurance companies to offer coverage.
Non-Renewals: Insurers may refuse to renew policies for properties in high-risk areas, leaving homeowners to seek coverage in more expensive surplus markets or government-backed programs.
Exclusions: Certain risks, like flood damage, are often excluded from standard policies, requiring separate, more costly insurance.
While changes in the industry are happening to adapt, such as overland flood coverage (a new insurance category implemented by the Insurance Bureau of Canada), the changes may not apply to every homeowner.
INCENTIVES FOR CLIMATE RESILIENCE
Some insurance companies now offer discounts for implementing climate change mitigation measures, such as:
- building with fire-resistant materials
- constructing flood-barriers
- installing hurricane-proof windows
WHAT CAN YOU AS A HOMEOWNER DO?
When things like government programs and incentives offered by insurance companies come up short, there are things we can do ourselves to adapt.
- Mitigate your risk as much as possible by investing in home upgrades to reduce vulnerability to disasters.
- Review and update home insurance policies annually to ensure adequate protection.
- Advocate for Community Resilience and push for better local planning and infrastructure to mitigate climate risks.
OTHER BROADER IMPLICATIONS
The intersection of climate change and home insurance raises questions about equity and access.
As lower-income homeowners may struggle with the rising home insurance costs or face displacement.
Additionally, regions highly affected by climate risks may see declining property values, creating long-term economic challenges for individuals and municipalities.
Luckily, here in Haldimand in Niagara have (so far) avoided the worst of the climate change impacts, but if the trends continue to go in their current direction, those bigger impacts may eventually make it home.
There are no simple or quick solutions to the challenges faced. It will take a combined effort from homeowners, insurance companies, governments and other groups to adapt.
Erie Mutual Insurance proudly serves the commercial insurance, farm insurance, home insurance and auto insurance needs of members throughout Southern Ontario including Haldimand, Niagara and Hamilton.
Please don’t hesitate to contact us with any questions you may have about this or any other topic related to your insurance.
SOURCES:
1. brocku.ca
3. chch.com
