Saturday, May 28, 2011

Recent fires and flooding don't concern insurance companies as much as climate change

Global Toronto: Insurance companies aren’t alarmed by the spate of natural disasters that have made headlines in Canada recently, but they do have another pressing concern – climate change. The companies are in good financial shape because Canadian regulators are some of the most cautious in the world, according to James Geuzebroek, acting vice president of the Insurance Bureau of Canada.

“The companies are well-capitalized and can absorb losses like those caused by the fires in Slave Lake and elsewhere in Alberta,” he said, adding that the companies will have no problem making a “significant payout” to people whose homes have been lost or damaged by fire.

However, those affected by the flooding in Manitoba and Quebec aren’t as lucky. Insurance policies don’t cover the cost of “overland flooding,” said Geuzebroek. In some cases, damage caused by sewer backup is covered, but not all homeowners have that proviso in their policies.

Though insurance companies aren’t concerned about the cost of recent natural disasters in Canada they are concerned about climate change – which, Geuzebroek said, has led to an increase in destructive weather patterns and, as a result, a spike in the number of claims being filed.

Geuzebroek said the spike is not due to overland flooding specifically but rather to severe weather that includes heavy rain and strong winds. He said payouts worldwide have doubled every five to ten years since the 1950s and are projected to increase further….

Great Slave Lake at Yellowknife, shot by sfbnurse, Wikimedia Commons via Flickr, under the Creative Commons Attribution 2.0 Generic license

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