April 2021
Jason Thistlethwaite
Available and affordable flood insurance is a critical strategy to support flood recovery in Canada. The benefits include efficient and robust compensation enabling Canadians to absorb and recover from flood damage, incentives for property and community-level risk reduction and decreasing the cost burdens of taxpayer funded disaster assistance programs by redistributing risk equitably across the population. These benefits are, however, elusive as insurance availability and affordability remains limited in high-risk flood areas where the costs are prohibitive for insurers and property owners. The Task Force on Flood Insurance and Relocation is mandated with examining options to address limited insurability in these high-risk areas. This paper supports this process by developing and evaluating the suitability of several different insurance scenarios for implementation in Canada. To illustrate strengths and weaknesses and trade-offs, scenarios were developed with variation in the roles of government and insurers in risk-transfer and stylized based on existing systems in similar jurisdictions to Canada.