Claims & Analytics: Bridging the Private Flood Market

While Canada and the United States both have flood damage exposure, there are similarities and differences between the two countries when it comes to flood insurance. Anyone in the United States purchasing a home with a mortgage knows if their new home is in a flood plain, because their lender would require flood insurance. The same is not necessarily true in Canada. Though having flood insurance is not always a requirement to purchase property in Canada, homeowners may seek flood coverage from the private market where many insurers offer residential overland flood coverage. Global flood losses from 2011–2021 were about $99B USD, and 82% of global economic damages were uninsured. In both countries, exposure to flood may disproportionately affect lower socio-economic classes, where there´s a more significant coverage gap. Swiss Re recently released a Sigma publication, together with a short webinar, addressing the issue: Reshaping the social contract: the role of insurance in reducing income inequality. Private flood placements are gaining a foothold in the property coverage insurance marketplace, providing a key means of bridging the coverage gap for flood risk in the US and Canada alike.

With both the US and Canada having private flood offerings, the market is in a better place to meet that coverage gap and better protect consumers. Carriers should be confident that their adjusters can manage flood losses. Most flood claims only require a few extra steps to confirm coverage, and then the loss is like any other water claim.