Homes damaged by floods could be renovated to withstand future flooding. So why aren't they?
'Identical reconstruction' tradition causes issues, but incentives could improve resilience
Soggy and stained futons, cushions and rugs. Scraps of moldy drywall. Mud-covered washers and dryers. Dead TVs. Warped wood flooring and furniture.
The damage, adding up to billions of dollars, can be seen in videos taken after major floods across Canada this summer.
Traditionally, with help from insurance, homeowners would try to restore their damaged homes as close to their original condition as possible, said Bernard Deschamps, who worked in the insurance industry for 35 years.
But now Deschamps and other experts say that's not good enough — we need to build back better to prevent future damage, and insurance companies and governments can help or hamper efforts to do that.
Simply rebuilding can lead to repeat damage
Deschamps has retired from the insurance industry and is now doing research on insurance and disasters for his PhD at the University of Quebec at Montreal.
He says the principle of "identical reconstruction" is part of many insurance regulations. The idea was to prevent homeowners from upgrading their homes at the insurance company's expense.
"That makes sense if it's a one-time event," said Deschamps, but he noted that it risks "simply putting people back in the same situation."
He says it makes no sense for people who might experience repeat flooding — something that's happening more and more as climate change increases flood risks from heavy rains and higher sea levels, alongside aging infrastructure and increasing urbanization.
Craig Stewart, vice-president of climate change and federal issues for the Insurance Bureau of Canada, says some places that once had major floods every 100 or 200 years "are now flooding a couple of times a decade."
That's led to a huge increase in insurance claims. This year has broken records, with $7.7 billion in claims due to severe weather by the end of September and three months left to go in the year.
Flooding in southern Ontario ($940 million) and Quebec ($2.5 billion) accounted for 45 per cent of those claims, IBC reported.
Stewart says insurers are starting to realize there's a problem with restoring or rebuilding homes to the way they were before.
"There's definitely a need to start helping homeowners be more resilient," he said.
Incentives to build back better
Stewart says five of eight major insurers in Canada now offer incentives for homeowners to build back better.
For example, they might give homeowners an extra 10 per cent on top of what it would cost to restore their home to its original condition if they rebuild using more resilient materials, such as water-resistant flooring, drywall, or insulation.
Deschamps says that in many cases, homeowners can significantly reduce potential future flood damage by making bigger changes, such as moving the electrical panel from the basement to the first floor.
But he noted that homeowners often don't know what renovations would make a home more flood resilient, and even if they did, those renos may cost significantly more than simply returning the house to its previous condition, so there's little incentive to go beyond that.
More stringent standards needed
Deschamps thinks such incentives need to come from both insurance companies and the government.
On the government side, he suggests passing new bylaws that require more stringent standards for reconstruction after a flood.
So far, he says, "that's not happening."
He suggests it's difficult for governments to impose measures that could increase the cost of construction or reconstruction, which likely wouldn't be popular with voters.
Stewart notes there have been some examples of governments requiring certain types of rebuilding in order to access disaster relief funds.
He cited a case a few years ago where homeowners along the Ottawa River were told they needed to elevate their homes when rebuilding, and says the insurance industry sees such stipulations as "a good thing" because they reduce risk.
Some municipalities have also started to ban or restrict basements — the most flood-prone part of a home — as living spaces in flood-prone areas.
Stewart said the insurance industry calling on governments "to do much more … and to come up with some sort of action plan on how we're going to reduce risk."
Regardless of whether you're building back after a flood or preparing for the future, many municipal governments do have some programs to incentivize flood resilience.
Blair Feltmate, head of the Intact Centre for Climate Adaptation at the University of Waterloo, says his research shows roughly 80 per cent of major communities across Canada offer subsidies for installing backwater valves to prevent sewage backups during storms — something fewer than one in 10 households in those communities have taken advantage of.
Feltmate also notes that some insurance companies now offer their own subsidies for installation of backwater valves and other flood prevention measures, such as sump pumps with battery backup and window well covers.
As well, he says insurers offer owners who've installed these preventative measures a five to 15 per cent reduction in insurance premiums.
Resilience programs for other disasters
There may also be home resilience programs for other kinds of disasters.
In Alberta, some insurance companies have hired Montana-based Wildfire Defense Systems to reduce the risk of damage to clients' homes from wildfires. WDS goes into at-risk communities and moves patio furniture away from walls, cleans out gutters and sets up sprinklers.
Feltmate noted that claims from major disasters and weather events are growing exponentially. Already, one in 10 homes are at such high risk that they're effectively "uninsurable" for flooding, IBC says.
Feltmate says insurers are realizing that in order to have customers to sell insurance to in the future, "we need to get all the risk out of the system that we can." That means both incentivizing homeowners to mitigate flood risk and rewarding them for doing so.
The Intact Centre for Climate Adaptation offers multiple fact sheets and how-to videos for ways to protect your home from flooding.
The good news, according to Feltmate, is that building back better and making a home flood resilient is possible.
"Just because a home has had a flood, that doesn't mean that it has to be a flood-prone home in perpetuity," he said. "You can act proactively to protect the property from flood risk."
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