Alberta grapples with soaring costs of severe weather

Over 10 per cent of the country's total $3 billion in insured damages from 2023's extreme weather events were in Alberta. One of those severe events was a historic tornado that touched down North of Airdrie on Canada Day.

"In Alberta alone, property damage exceeded $330 million, including over $100 million paid to repair and replace vehicles following hail and flood events. Since 2020, insured losses due to severe weather in Alberta have exceeded $4 billion. Over $500 million of that went to insurance claims involving damaged vehicles," stated the Insurance Bureau of Canada (IBC)

According to the IBC, 2023 now ranks as the fourth-worst year for insured losses in Canada due to severe weather with hail, wildfire, wind and flood events.

Total damages caused over $3.1 billion in insured damage according to year-end estimates from Catastrophe Indices and Quantification Inc. (CatIQ). IBC noted that while 2023 was a record-breaking year for wildfires, flooding also continued to cause destruction in nearly every region across Canada.

2023 Insured Catastrophic Losses (CNW Group/Insurance Bureau of Canada)

Aaron Sutherland, Vice-President, of Pacific and Western, Insurance Bureau of Canada (IBC) underlined that Alberta continues to experience an alarming trend in severe weather events.

"This was the third straight year in which the province saw significant insured damage from hail, wind and rain," Sutherland said.  "The costs associated with these devastating events are placing significant pressure on insurance premiums in the province. It's more important than ever that we redouble our efforts to better protect communities to help improve the affordability of insurance coverage moving forward."

The IBC added that the province's auto insurance market is what they called 'considerable strain' due to the rate cap implemented last November.

"With inflation, auto theft, and legal awards continuing to grow, severe weather events add another cost pressure to auto insurance premiums in Alberta, which is why IBC is calling on the government to urgently implement reforms that improve the affordability of coverage moving forward."

On a nation-wide scale, IBC said that noteworthy severe weather events last year include the Atlantic Canada cold snap; Ontario and Quebec spring ice storm; the Tantallon, Nova Scotia, wildfire; Nova Scotia flooding; Prairies summer storms; the Winnipeg hailstorm; Ontario severe summer storms; the Okanagan and Shuswap, BC, area wildfires; and the Behchokǫ̀-Yellowknife and Hay River, NWT, wildfires.

2024 may be another record-breaking year of severe weather, as the province has already announced it is preparing for possible droughts come spring and summer. While droughts will have a significant impact on the province's agricultural and farming industry, they may also reverberate to a higher risk of more wildfires.

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