The Bog is where thoughts, opinions, discussion pieces, and action converge. Influential thinkers from the water community are invited to share their insights on current or controversial water topics. Please note that the views expressed herein are those of the authors, and do not necessarily reflect the position of the Alberta WaterPortal.
Six tricky questions about flood insurance in Alberta
Recent significant floods and the predicted increase of extreme weather events have many Albertans, from insurance experts to governments to property owners, talking about flood insurance.
Throughout these conversations the same basic, but tough, questions continue to rise. We don’t know all the answers, but here are the questions as they relate to the current situation and developments.
1. How do you define a flood?
Is a flood a specified volume down the closest river? Overland water only? More than five basements flooded in one community? Groundwater infiltration? When a provincial disaster is declared?
The Insurance Bureau of Canada states that in general, overland flooding resulting in water entering a home is not covered. Overland flooding usually occurs when bodies of water, such as rivers, dams, and other watercourses, overflow onto dry land and cause damage.
There are also differences for insurance between flood damage and water damage.
What is clear is that consensus on the definition of a flood would enable consistency in policy development, education, and coverage levels for the large number of stakeholders impacted by flood insurance including the Alberta public. Once a flood is defined, you can narrow down what can and can’t be covered in the event of damage.
2. Who owns flooding risk?
When floods subside there’s usually plenty of finger pointing on what could’ve been done, who’s responsible, and what needs to be done to avoid the damage of future floods. However, the crux question is who owns the risk?
If we look at an existing house on a floodplain, there were multiple parties involved throughout the steps leading to the development, approval, construction, purchase, insurance, and renovations or other property work. Because there are so many diverse stakeholders and circumstances it’s unlikely there will ever be a single body, or owner, responsible for flood risk (or its management) in Alberta.
So, if there isn’t one owner of the risk, it has to be shared – and how that works is yet another question! Looking around the world it’s common for flood risk to be shared across levels of government, private insurance companies, and individual householders. This would require a strong collaborative and inclusive approach to developing flood risk and management in a province like Alberta.
However there’s more to that challenge, as how people work together is influenced by their own perception of a particular issue. When it comes to risk, in many cases, people’s perception is often to underestimate it.
Programs like Disaster Financial Assistance Arrangements (DFAA) have also impacted people’s perception of risk, building an expectation for some people that someone else, like the government, should cover the costs of their loss. In theory the government has obligations to support the public; however this approach exposes all taxpayers to large costs in the event of a disaster and potentially undermines private insurance efforts.
To revisit the question of who owns flooding risk, there needs to be a balanced distribution of risk between government, private sector, and homeowners. How that could work for Alberta will take some time to develop.
Number of hydrological and meteorological disaster events in Canada (1900-2013)
Source: Canadian Disaster Database
3. How do you cost flooding risk?
After you decide how flooding risk is dispersed, there has to be a common value to disperse it – and that’s usually financial. However, it’s not as easy as divvying up costs. Cheap insurance can reinforce risky choices of where and how to reside. At the other end of the scale, expensive insurance precludes many people who want to cover their property for damages but cannot afford to cover it.
One suggestion is insurance pricing reflects flood mitigation measures that have been invested in. For instance, a province spends millions on flood mitigation, and these investments are captured in insurance premiums.
Another complication for pricing flooding risk is that each region is different, and a broad brush approach to pricing would not be suitable. This requires tools, like updated flood mapping and modelling, to support the suitable pricing of risk across different locations.
Additionally, flood mapping and modelling needs to be adaptable, as changing infrastructure (such as flood mitigation) would have an impact on insurance pricing. This creates an obstacle for insurers and municipalities to overcome on the timely communication of infrastructure changes that may influence insurance premiums.
4. Should the province or the nation lead changes in flood insurance?
Since every provincial assistance program is different, a ‘one size fits all’ approach would be difficult. Also, eliminating programs like the DFAA is not a black and white decision at the federal level, let alone considering provincial implications.
Further, the government can, and has, introduced regulatory prevention strategies (similar to Ontario where development on flood plains is not allowed), but the insurance industry must also be involved heavily in leading the change and educating the public in a clear way on what flood insurance means.
5. What’s being done at the moment?
- Mitigation and prevention strategies are being employed in Alberta, including:
- Infrastructure for flood mitigation
- Flood mapping
- River modelling
- Erosion control
- Legislation to limit development in floodways, and
- Education and public awareness about flooding.
Public Safety Canada is working with the Insurance Bureau of Canada in exploring a ‘Canadian solution’ to the problem of overland flooding. Work is starting up again now the federal election is over.
Public Safety Canada is also collaborating with Environment Canada and Natural Resources Canada to identify national standards on flood mapping. In addition they will be learning from the United Kingdom and Germany to inform Canada’s approach.
A private sector working group has been established for the insurance industry to collaborate on the challenges faced in the development of flood insurance in Canada.
6. What can I do to protect myself now?
We suggest the following resources to get you started:
- Institute for Catastrophic Loss Reduction Booklet for Reducing Basement Flooding.
- Public Safety Canada Floods – What to do?
- If you’re interested in an overview of flood and drought and watershed management in Alberta, view this webinar.
Further information and support may also be available via your local community or municipality. For example in Chestermere (Alberta) a group has formed in response to the July 2015 floods. Their goal is to better understand and respond to some of the emotional impacts of the flood, and to source and provide access to resources to support residents, no matter the level of impact on their lives.
Flood insurance in Alberta won’t be here overnight, but a number of providers are starting to offer overland flooding options for property owners.
Flood insurance is not as simple as offering policies to everyone. Updated flood mapping and risk assessment of flood prone areas, improved land-use planning, public education and awareness, and investments in mitigation are all required as part of an effective approach. By asking simple but hard questions, it’s clear the issue is not just an insurance topic and any approach to changing the situation needs to be an inclusive one.
This blog was informed and inspired by a Stakeholder Discussion - Residential Flood Insurance session, facilitated by Public Safety Canada and the Insurance Bureau of Canada in Calgary earlier this month.
Welcome to the October edition of the Roundup. If you have content you'd like included in our next Roundup please contact us. Happy reading!
Government of Alberta announces Elbow River, Calgary, and High River flood mitigation projects as well as Disaster Recovery Program changes
Government of Alberta budget overview
On 27 October the Government of Alberta released their budget. We've summarized the key water-related elements in a budget overview.
High River flood mitigation projects and Disaster Recovery Program changes announced on 2 November
Further to the announcements on 26 October outlined below, on 2 November the province announced $30 million in multi-year funding for the Town of High River flood mitigation projects. Funded projects include:
- Design and construction of the southwest berm
- Design and construction of the 5th Street berm
- Lineham Bridge rehabilitation, and
- A working group to assess upstream and downstream impacts of the planned flood defences (this group will be supported by an additional $2 million for flood modeling).
The decision was made not to build a diversion for High River due to concerns about environmental sustainability and cost effectiveness.
Representation on the working group will come from the province, Town of High River, Municipal District of Foothills, and the Highwood Management Plan Public Advisory Committee.
Changes were also announced for the Disaster Recovery Program (DRP):
- The government will cease collection on overpayments for files of $5,000 or less (affecting nearly 550 outstanding case files).
- In about 75 cases where overpayments are more than $5,000, files will be handled on a case-by-case basis.
· The government will be closing nearly 450 files that are classified as inactive (applicants will be contacted before the close out).
26 October announcements
On 26 October the Government of Alberta announced a range of flood mitigation projects, and ongoing funding of $150 million over ten years, to help protect communities along the Elbow River and Calgary from a repeat of the costly 2013 flood. Here's the list of work announced and briefly what it means.
1. Springbank Off-stream Reservoir chosen over other options including McLean Dam
McLean Creek Flood Storage (McLean Dam) is off the table, and the Glenmore Diversion (also known as the Calgary flood tunnel or “the aqueduct”) is on the shelf.
Working in tandem with the Glenmore Reservoir, the Springbank Off-stream Reservoir aims to provide protection for a 2013-level flood on the Elbow River. During floods a canal would carry water from the river to the off-stream reservoir (capacity 70.2 million cubic metres). After floods the excess water would be returned to the Elbow River.
Read the independent review of the Bragg Creek / Springbank Off-stream flood storage and the McLean Creek Flood Storage.
Watch a conceptual animation of the Springbank Off-stream Reservoir.
Environment Minister Shannon Phillips says the Springbank flood mitigation option is cheaper, faster, safer and better for the environment— Shawn Logan (@SUNShawnLogan) October 26, 2015
2. Localized Mitigation for Bragg Creek and Redwood Meadows
Dikes and drains in Bragg Creek with protection to 2013 level with freeboard (an extra level of protection above the base flood elevation).
Redwood Meadows’ work will be determined after Bragg Creek, as Redwood Meadows is downstream of Bragg Creek.
3. Bow River Working Group
A stakeholder representative group tasked with providing assessment on future flood protection along the Bow River. It is expected this group would continue existing collaborative Bow River group work undertaken to date.
— Colette Derworiz (@cderworiz) October 26, 2015
4. Five River Hazard Studies
This work involves the production of new flood inundation and flood hazard maps for the Bow, Elbow, Sheep, Highwood, and Peace Rivers.
The announcements signify a breakthrough for flood mitigation action in, and upstream, of Calgary. However it's no secret there’s a lot of work to be done. The announcements have also triggered many questions surrounding the operation of the Springbank Off-stream reservoir including:
- Would the Glenmore Reservoir or Springbank Off-stream reservoir be filled first?
- What cues will prompt the flood and compensate model to be deployed?
- How quickly will the reservoir be drained, keeping in mind groundwater flows?
Numerous questions have also popped up around what’s happening for people impacted by flooding in areas along different rivers, or in different watershed basins, and if the River Hazard Studies will involve traditional flood mapping or other techniques.
Share your questions
Comment on this blog to let us know your questions, thoughts, or concerns about flood mitigation across Alberta – we’ll do our best to respond to them!
Welcome to the September edition of the Roundup. If you have content you would like included in our next edition of the Roundup please contact us. Happy reading!
|"Red Deer River" by Ricky Leong is licenced under CC BY 2.0.|
Opinions and Columns
Note: these pieces do not necessarily reflect the opinions of the Alberta WaterPortal
Roy MacGregor: In Globe debate, leaders ignore Canada’s No. 1 resource: water
The Globe and Mail reporter highlights the lack of conversation about water in recent political debates. ...Click here to continue reading.
Patricia Matthews: City of Chestermere 2015 Flood Response Summary
The Chestermere Mayor shares a timeline of events and lessons learned in the City's flood response for the July 2015 storm. ...Click here to continue reading.
Britain's water crisis - are we killing our rivers?
South Carolina experiences deadly floods
Extreme weather events are in the cards
900 years of tree-ring records tell a story: Declining river flows
China's sponge cities: soaking up water to reduce flood risks
California drought drives cities to filter drinkable water from sewage
Climate brokers gather best data for policy making
City's on the move with latest piece of public art
The Oldman Watershed is seeking votes to win $100,000 in funding for an outreach and education film project. Click here to vote!
A reminder the Red Deer River Watershed Alliance are seeking public input on their draft Integrated Watershed Management Plan,
Phase One, Water Quality. Click here for more background and a survey link.
Reports and Research
The Report of the Auditor General - October 2015 is now available.
What is the law of Water Allocation in Alberta? Can it meet the Challenges of Water Management? By David Percy
The last five years have seen unprecedented interest in the state of Alberta water law, culminating in a public, province-wide Water Conversation conducted by Alberta Environment and Sustainable Resource Development in 2013.
Some of the conversations and many recent commentaries focused on two themes in particular. Both are vital, because they challenge fundamental principles of the Alberta Water Act.