‘A Riskier Place to Live’: Canada Could Be Uninsurable in a Decade, Says Expert

Jan. 15, 2025

Canada’s insurance sector is raising alarms about the potential for the country to become “uninsurable” by 2035 due to insufficient policy action on escalating climate disasters. Meanwhile, a former California insurance official has criticized the industry for underwriting the very fossil fuel projects that worsen the climate crisis.

In 2024, insured damages from extreme weather in Canada hit a record C$8.5 billion, reports the Globe and Mail, citing a recent report by the Insurance Bureau of Canada (IBC). The tally was triple the losses recorded in 2023, and 12 times the average annual losses during the 2001-2010 decade.

“Canada is clearly becoming a riskier place to live, work and insure,” said Craig Stewart, IBC’s vice-president of climate change and federal issues. “This increased risk is now impacting insurance affordability and availability.”

“Canadian governments must be more pro-active to properly manage and mitigate risk,” Stewart added. To do so, officials must enable investments in infrastructure to defend against floods, enact land-use rules to prevent housing in flood zones, promote fire-smart education in wildfire zones, and finalize overdue climate resilience building codes.

“The protection gap is growing, and costs are increasing, affecting affordability and even availability of insurance coverage,” Stewart warned. If policy-makers continue to slow adaptation, “we should all get ready to live in an uninsurable country a decade from now.”

In California, former insurance commissioner Dave Jones likewise fears the emergence of an “uninsurable future”—but rather than adaptation, he had climate mitigation in mind when he spoke with The Lever last week.

“I believe that we are marching steadily towards an uninsurable future in the United States and across the globe because we’re not doing enough, fast enough to transition from fossil fuels and other greenhouse gas emitters,” Jones said, speaking in the context of the ongoing wildfires in Los Angeles County.

California recently enacted regulatory changes to force insurers to keep insuring homeowners for wildfire. It may help in the short term, but “we’re not going to rate increase our way out of this problem,” warned Jones, now the director of the Climate Risk Initiative at the University of California, Berkeley’s Center for Law, Energy and the Environment.

Jones also highlighted the contradiction in the insurance sector’s support for fossil fuel projects. There is “no question” that the insurance sector’s own investment in and insurance of fossil fuels “is contributing to our inability to transition,” and in doing so contributing to its own demise, Jones added.

“The magnitude of climate driven losses is equivalent to the amount of premium that insurers are collecting from the fossil fuel industry,” he said, citing a report by climate advocacy group Insure Our Future. “Insurance is the canary in the coal mine with regard to the climate crisis, and the canary is expiring.”

[Top photo: Jasper wildfire, Laura Durno/Twitter]