Flooding may be making home insurance difficult to obtain, but one broker in perennially waterlogged Brandon, Manitoba hasn’t had any issues with Canada Mortgage Housing Corporation insuring mortgages.
“We had the flood of the century in 2011, and I’ve never had a single qualm from CMHC relating to concerns over potential flooding,” says Chris Turcotte, principal broker with Centum Mortgage Choice. “And today we had a car float three-quarters of a block down the main street before neighbours came out to stop it. Knock on wood, that attitude from CMHC will continue.”
Don Pratt, CEO of Swan Valley Credit Union in Swan River Manitoba, hasn’t encountered any reticence from CMHC on backing mortgages in flood-prone areas.
“I checked around and asked some of my people, and we haven’t seen anything like CMHC backing away from insuring a mortgage in such a case,” says Pratt, “and I’ve been at this branch since it was sold by the Bank of Montreal in 1993 to become a credit union. I’m going on 20 years in the business.”
CMHC’s ambivalent attitude towards insuring mortgages on homes in flood-prone areas isn’t shared by the insurance industry, as one university analyst predicts that millions of Canadians could find their homes declared uninsurable as the insurance industry tries to cope with skyrocketing water damage claims.
Blair Feltmate, the chair of the Climate Change Adaptation Project at the University of Waterloo, was reported as saying that “In the absence of weather-hardening infrastructure, under the new extremes of climate change and extreme weather events, we are categorically heading towards an uninsurable housing market in Canada in many, many regions.”
Feltmate points to 15 years’ worth of accumulated data that shows the frequency and severity of extreme weather have increased, and that here in Canada water damage has moved to the top as the leading cause of property insurance claims, surpassing fire.
Calgary is just now assessing the damage to its downtown from severe flooding, while its southern neighbour Medicine Hat is now feeling the effects of swollen rivers from last week’s torrential rains.
Alberta Premier Alison Redford has suggested that provincial cleanup efforts could take upwards of a decade.
Canada is currently the only G8 country in which property insurance does not include damage caused when water enters the home through windows and doors – which has been happening throughout southern Alberta the past seven days and on a regular basis in southern Manitoba.
For Manitoba’s Turcotte, dealing with homes in flood-prone areas is just a part of business.
“When I first came to Brandon – I’m a Winnipegger – I was told that flooding is a part of life,” Turcotte told MortgageBrokerNews.ca. “Sure, we get more due diligence from the major lenders on whether the home is in a flood plain area, but – knock on wood – we haven’t had any problems with CMHC insuring mortgages.”