19 June 2019 13:30
Flood waters in Ste-Marie-de-Beauce, Saturday, April 20, 2019 | Photo : Denis Méthot
The insurance Bureau of Canada (IBC) has officially presented the three solutions that he advocates in order to protect canadian households are most at risk of flooding. This report is a sequel to the work of the advisory Council on the floods from the national round Table on the risk of flooding, which was established by the federal minister of public Safety, Ralph Goodale.
The objective of the working group was to present solutions that follow six principles : affordability, inclusivity, efficiency, compensation optimal, the protection of taxpayers and the financial sustainability.
As reported by FlashFinance.ca last January, the working group, which is the result of the advisory Board and for which the BAC is a part, proposes to the ministers, federal, provincial and territorial authorities responsible for emergency management to adopt either the option market in the pure state, the option of the status quo suitable, or the option of the creation of an insurance pool.
Three tracks of solution
If the government chose to adopt the first-ever, government programs of financial assistance in case of disaster does not cover the flooding of private residences. The owners should then self-insurance, purchase insurance on the private market, or to move, exposing the TRAY. A “considerable part” of the owners would be excluded from the insurance market.
According to the working group, this approach ” may make a good number of Canadians are more vulnerable financially.” This approach, however, is used in Australia, where a few high-risk individuals have subscribed to insurance based on the risk because of their high costs, stresses in the TRAY.
The second option is the one that is closest to the current situation : the private sector assumes some of the responsibility “based on its risk tolerance” and government programs of financial assistance in the event of a disaster remain in place.
The working group considers that this option ” maintains the pressure on all levels of government to invest in the mitigation of floods because they retain the liability, if any, to help homeowners most at risk “.
However, the owners would still be subject to the ceilings of the financial assistance in the event of a disaster and the financial viability would be in danger because of the ” increasing pressure of the cost of the floods for the government “. The working group suggests that any measures to mitigate the government’s exposure.
The option of the insurance pool would be available to homeowners at high risk that are not insurable. These would be brought together in a group and pay the premiums based on the risk. These premiums would be capped and funded by mechanisms.
This is the option that most closely matches the principles of affordability, inclusion and compensation optimal, since it promises a coverage for those who are not insurable.
The pool gets the best rating
According to a review of options in relation to the principles carried out by the working Group option, the insurance pool gets the best marks in terms of affordability, inclusion, and compensation optimal, in particular.
“The multi-stakeholder working Group is of the opinion that the three options presented in this document will provide plans of action viable to reduce the number of properties at high risk of flooding. They all have strong points and weak points distinct in their own way to comply with the guiding principles. “
The TRAY reminded, however, that the long-term contribution of all orders of government is necessary to ensure the success of the implementation of any solutions.
The population is encouraged to challenge their mp
In a full page ad in the daily toronto Globe and Mail, the BAC is asking Canadians to question their mps about the inclusion of a plan of action for the floods in their election platform. “If it’s not, this is not relevant for Canada,” writes the paper TRAY at the conclusion of the advertising.
The BAC also suggests that the federal government create a national action plan on floods which would displace people in areas at risk, that would teach Canadians about flood risk, who would invest in the defence against the floods, which would provide all Canadians access to affordable coverage and that would put an end to construction in the floodplain.