The extra cost of his insurance made no sense. He called the insurer, and their response? “Yellowknife is now a high-risk area due to wildfires.”
That’s how David Brady comes to be spending an extra $200 this year on his car insurance, despite no claims or changes in circumstance.
“Across the board, there will be an increase in rates for people,” he said he was told. He asked to speak to a supervisor, he told Cabin Radio, who confirmed “they are raising the rates because there have been multiple claims from people for home and auto insurance.”
The insurer in question is TD. Reached by email and asked to confirm what its Northwest Territories customers might expect, a TD spokesperson declined to answer questions – other than to state this was “an industry issue” – and instead referred Cabin Radio to an association called the Insurance Bureau of Canada.
That association, known as IBC, had already been in touch.
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At the start of last week, IBC published a press release announcing that the NWT’s summer wildfires had “resulted in over $60 million in insured losses,” never mind the uninsured losses that many families are still grappling with.
We similarly asked IBC to give us a sense of what the wildfire crisis would do to the average resident’s premium in the territory.
In an emailed response, IBC national director of consumer and industry relations Rob de Pruis said “no one severe weather event or natural catastrophe impacts premiums,” as the insurance industry plans for those and is, he said, “a very competitive market” in which customers can shop around.
But De Pruis said the insurance industry across Canada is “seeing an increase in the frequency and severity of severe weather events” that might more broadly have an impact.
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“Insurers price for risk and Canada is getting riskier, which can have an impact on insurance rates in the future,” De Pruis wrote.
In a second example, a Yellowknife resident reported to Cabin Radio that their home insurance more than doubled annually after the wildfires.
The resident said they had taken advantage of their policy’s provision of $2,500 in emergency cash for use during the evacuation. The Northwest Territories government had told residents to lean on their insurers for assistance if they could do so, and limited insured residents’ access to some government payments that became available as the crisis drew on.
At the time, the resident said, the representative they spoke with by phone to access the emergency cash was not able to tell them if their premium would go up. The representative said they were an extra staff member brought in to help handle the large volume of calls and were not qualified to assess what could happen to the premium.
The answer arrived in the mail three months later: a 114-percent annual increase.
De Pruis at IBC said insured losses from natural disasters in Canada topped $3.4 billion in 2022 (a figure for 2023 to date wasn’t provided), contrasting that with an average of $632 million per year between 2001 and 2010.
IBC, as an industry association, is using the upward trend in claims each year to demand that the federal government “improve climate defences” – essentially arguing that if you’re paying more for insurance, it’s your government that should be better prepared rather than your insurer reducing the cost.
Governments at all levels “need to do more to prioritize investments that build our resilience and better protect our families and communities from a changing climate,” De Pruis wrote.
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“This includes investing in new infrastructure to protect communities from floods and fires, improving building codes, better land-use planning and, increasingly, creation of incentives to shift the development of homes and businesses away from areas of highest risk.”
Has the cost of your insurance changed since this summer’s wildfires?
Use the form below to tell us about your situation, and help us to better understand how the insurance picture is changing across the Northwest Territories.
