The cost of Tuesday’s widespread flood in Toronto could easily surpass $1 billion, according to the Insurance Bureau of Canada (IBC).
The bureau said Tuesday’s storm is comparable to the destructive 2013 flood in Toronto, which resulted in $1 billion in insured residential and commercial damages (adjusted for inflation in 2021) and was among the 10 most expensive natural disasters in Canada.
“It was a similar-sized event as to what we witnessed 10 years ago,” said Craig Stewart, vice-president of climate change and federal issues at IBC.
“We expect the overall cost (of the 2024 flood) to be much more. And that would be because of the damage to city infrastructure — the damage to transit — that occurred.”
A little over 97 millimetres of rain was reported at Toronto’s Pearson airport by Tuesday afternoon. By comparison, Toronto’s single-day rainfall record was on July 8, 2013, when 126 millimetres fell at Pearson airport.
The cost in uninsured damages from overland floods, which will mostly be borne by the government, is typically much higher than the total amount of insured claims. This difference is known as the “insurance gap”: for every $1 of insurable loss, there is generally $3 to $4 of uninsurable loss realized, according to Blair Feltmate, head of the Intact Centre on Climate Adaptation at the University of Waterloo.
Overland flooding insurance, which protects against water coming through cracks or windows in basements, is limited and expensive in the GTA, as it’s not covered by basic policies, added Stewart. Some insurers might offer it as an endorsement — but not to residents in high risk areas.
“Because many Torontonians will be uninsured for the loss, they’ll be relying on government bailouts to protect them, or they’ll pay out of pocket,” he added.
An official industry-wide estimate of total insured damages will be available in early August, according to CatIQ, Canada’s insured loss and exposure indices provider.
This is a developing story.
