For many Canadians, purchasing a home is the single largest investment they will ever make. Yet, despite growing concerns about climate change and extreme weather events, information on climate-related risks remains difficult to access in the Canadian real estate market. Unlike in the United States, where Zillow has begun integrating climate risk scores into real estate listings, Canada is still in the process of developing a centralized portal to make this information readily available.

The Growing Financial Impact of Climate Change

Climate change is no longer a distant concern—it is a reality that is already reshaping the housing market and insurance industry. In the past decade, Canada has seen a staggering 379% increase in annual insurable losses due to climate-related disasters, such as wildfires, floods, and severe storms. These disasters are not only affecting homeowners directly but also driving up insurance costs and, in some cases, making certain properties uninsurable.

A recent survey found that 35% of Canadians now consider climate-related risks when purchasing a home, with recent buyers being even more cautious. The rising frequency of extreme weather events means that failing to account for these risks could result in financial hardship, whether through increased insurance premiums or unexpected repair costs following a disaster.

The Role of Home Insurance in Managing Climate Risk

Given the increasing threat of natural disasters, home insurance is more critical than ever. However, not all policies provide equal protection. When evaluating home insurance options, homeowners should consider the following:

  • Flood Coverage: Many standard policies do not include overland flood insurance, which is essential in flood-prone areas.
  • Wildfire Protection: With wildfires becoming more common, homeowners should review their policies to ensure they have adequate coverage for fire damage.
  • Sewer Backup Coverage: Heavy rainfall and storm surges can overwhelm municipal drainage systems, leading to costly basement flooding.
  • Replacement Cost vs. Actual Cash Value: Policies that cover replacement costs rather than actual cash value ensure homeowners can fully rebuild after a loss without worrying about depreciation.

The Need for Transparency in Real Estate and Insurance

Access to climate risk data should be a fundamental part of the home-buying and insurance process. While the Canadian government is working toward making this information more accessible, homebuyers and homeowners must take proactive steps to assess their risk. Consulting with insurance professionals who understand climate-related exposures and can recommend appropriate coverage is an essential part of protecting one’s investment.

Looking Ahead: A More Resilient Future

As climate change continues to shape the real estate and insurance landscapes, Canadians must adapt by making informed decisions. Whether purchasing a home or reviewing an existing insurance policy, factoring in climate risks is no longer optional—it is essential for financial security. By prioritizing comprehensive home insurance that accounts for natural disasters, homeowners can better safeguard their properties and investments against an uncertain future.

In an era where extreme weather is becoming the norm, understanding and mitigating climate risk through insurance is not just a precaution; it is a necessity.

Jenny is a business insurance broker with Waypoint Insurance. She can be reached at 604-317-6755 or jhansen@waypoint.ca. Connect with Jenny on LinkedIn at https://www.linkedin.com/in/jenny-holly-hansen-365b691b/.  Connect with Jenny at BlueSky: https://bsky.app/profile/jennyhollyhansen.bsky.social

Jenny Holly Hansen is a cohost with Chris Sturges of the Langley Impact Networking Group. You are welcome to join us on Thursday’s from 4pm to 6pm at: Sidebar Bar and Grill: 100b - 20018 83A Avenue, Langley, BC V2Y 3R4

Tags:  #Jenny Holly Hansen #Climate Risk #Home Insurance #Etreme Weather Events #Wildfires #Floods #Severe Storms #Sewer Back Up #Replacement Cost #Actual Cash Value

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