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.
“In addition to these losses, about $24 billion more in uninsurable damage was absorbed by governments, businesses, and individuals,” the Globe adds.
“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.”
I am a Canadian Structural engineer and Passive Solar designerr living in Nova Scotia. I have been studying, writing, and giving talks about climate change since at least the third IPCC. In November, 2002, two colleagues (professor Spooner of Geology and professor Johannesen, of Environmental Studies) and I sat on a public discussion panel with the then-Minister of the Environment & Labour David Morse. The presentations by the three of us were far-ranging, from the future unavailability of disaster insurance to sea level rise, to how efficiently designed buildings can drastically reduce the use of fossil fuel. The Hon. David Morse did not have anything substantive to contribute, other than offering some well-worn platitudes. One of my colleagues on the panel stated, “Insurance companies estimate worldwide costs of climate change caused by human activities could reach US$302.4 billion annually by 2050.” Without action, we concluded that the future was bleak. Professor Johannessen stated: “If you think mitigated climate change is expensive, try unmitigated climate change.” And now, almost only a quarter century later, humanity has brought us beyond the brink.
We need to get pro active around issues of climate adaptation, mitigation and transition off fossil fuels, and we need to do it yesterday.
Instead, the States have elected a climate denying drill baby drill president who intends to do all he can to suppress the reality we’re facing and pretend that military power and strong arm tactics will convince Nature to give us all a pass.
It isn’t going to happen. As the wonderful intellectual singer, Laurie Anderson put it so succinctly over a quarter century ago:
NATURE HAS RULES AND NATURE HAS LAWS AND CROSS HER……….AND ITS THE MONKEY’S PAW.
Or as that late great comedian George Carlin said: ‘We’re circling the drain’.