The Insurance Bureau of Canada (IBC) has released its preliminary report on damage claims from the Fort McMurray wildfire in northern Alberta.
The giant forest fire in western Canada was dubbed ‘the beast” because of its size, speed, the destruction caused and the difficulty in controlling and extinguishing it.
The fire burned into the town destroying well over two thousand homes and other buildings. Over 80,000 people were evacuated from the region. The fire moved so quickly people were driving out of town even as flames towered about both sides of the highway.
Insurance claims so far amount to C$3.58 billion. This is a new record for damage claims and is more than twice as much as the previous mostly costly natural disasters, the flooding in Calgary and southern Alberta in 2013 with claims of $1.78 billion.
Claims from that massive flood could have been much higher except that many homes and businesses were not covered for overland flooding. However, the provincial and federal governments paid some 4-billion dollars for a variety of uninsured losses.
One of the other major disasters with insurance claims over a billion dollars was the ice storm in 1998 affecting eastern Ontario, southern Quebec, and parts of New Brunswick. That storm resulted in insurance claims of $1.6 billion (in 1998 dollars)
“This wildfire, and the damage it caused, is more alarming evidence that extreme weather events have increased in both frequency and severity in Canada,” said Don Forgeron, President and CEO, Insurance Bureau of Canada
The wildfire claims include more than 27,000 personal property claims; with the average claim of $81,000. There are also more than 12,000 auto insurance claims, averaging $15,000 per claim. In addition, there are more than 5,000 commercial insurance claims that average over $250,000 per claim.
Climate change causing more disasters
“In recent times, wildfires and flooding have turned extreme and at times tragic,” said Forgeron. ” We must build a more resilient country to better protect those affected by the very real impacts of our changing climate. By taking action now, we can minimise costs to taxpayers and better equip homeowners for the risks and challenges that lie ahead.”
IBC vice-president Bill Adams said, “ultimately, what we are seeing is that our climate is changing. And the long-term trends are directly the result of some of those dynamics”.
He added more needs to be done in consideration of climate changes including the way homes are built, especially in fire and flood-prone areas.
Beyond the costs of insurance claims, there are other economic losses from the fire. This includes well over a billion dollars in lost oil production. Then of course there is the intangible losses in terms of irreplaceable personal items, lost wages and jobs, and the emotional toll on individuals and families.
The total cost has yet to be determined, but the federal government has already announced a $300-million cash injection as part of its Disaster Financial Assistance Arrangements programme.
However, as in previous cases, public funds to pay for firefighting and evacuee relief, police services, and other associated services could push the cost to the public purse into the billions.
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