The old saying goes ‘Into every life a little rain must fall’. But the deluge experienced by the city of Toronto on Tuesday may come at a very steep price. Tuesday’s precipitation alone beat the monthly average for July, according to Environment Canada. The insurance industry estimates losses from the storm may surpass $1 billion. Why so much? Let’s take a deeper look at the Toronto flooding damages. And, more importantly, what could have been done to prevent, or lessen, the severity of the outcome?
Toronto flooding: A storm like no other
Tuesday’s rainstorm submerged stretches of highway, halted subway services, and flooded commercial and residential buildings across Toronto and beyond. Kitchener-Waterloo, Burlington, Brampton, Mississauga, and other major Ontario cities experienced considerable flooding. Though the industry awaits a true loss estimate, experts say the flood resembles one that happened almost 11 years ago to the day. The July 2013 flood in Toronto contributed to the second costliest insured loss year in Canada’s history, according to IBC. Alone, it cost the industry $1 billion in damages (adjusted for inflation in 2021). However, the storm this week spanned a much larger geographic area, experts say. “The flooding from this week will undoubtedly be a large event for the Canadian industry,” says Laura Twidle, CEO of Catastrophe Indices and Quantification Inc.
The insurance industry only began offering overland flood coverage after the two floods of 2013, says de Pruis. As extreme weather events become more common, insurers are paying significantly more in claims concerning severe weather. This includes fire, flood, wind, or hail. “If we think back about 15 years ago, the insurance industry was paying out on average about $700 million a year for severe weather events,” he says. In 2022 and 2023, the industry paid out more than $3 billion a year for claims related to extreme weather.
Damages incurred…so far
Cleanup from one of the wettest days in Toronto history is just beginning. The picture of the damage done to property and infrastructure is becoming clearer:
- Hydro One: The provincial utility that provides electricity to regional companies — continues to work on the damage at the west end station.
- Public transportation: The TTC is still investigating damages, spokesperson Adrian Grundy said Wednesday. There was a significant amount of damage to the elevator shafts at Union Station. They are still out of service after they filled with water.
- Residential buildings: The city says it received more than 700 calls for flooding in basements. A nursing home in Mississauga was evacuated when its first floor flooded with more than five feet of water. Damage includes leaking roofs and condo balconies, backed-up pipes, and flooded parking garages.
- Highways and roads: The city says it’s too early to estimate the damage to Toronto roads.
- Schools: Around 20 schools lost power on Tuesday, but all buildings now have power.
- City Hall: The ceiling of one office at City Hall partially collapsed, and water ran down several stories of an interior stairwell.
- Evergreen Brick Works: This historical building was unable to get flood insurance because it’s located on a floodplain. As a result, the owners estimate the flood damage is between $250,000 to $300,000.
Damaging effects of climate change
The recent deluge in Toronto serves as a reminder of the growing impact of climate change on urban areas. “We will see more of these [flood events] in the future as our climate warms. As we continue to rip up green space in exchange for buildings, hard surfaces, and pavement, [and] big box stores,” says Glenn McGillivray, Managing Director of the Institute for Catastrophic Loss Reduction. “I’ve seen yesterday’s flooding described as shocking, and I’m not shocked,” says McGillivray. “We’ve got to stop pretending that we’re shocked and start taking action. Overall, Toronto does well at stormwater management, especially for its size, he says.
Hurricane amounts of water
Meteorologists say that Tuesday’s record rainfall was due to three consecutive storms that fell on the city. “We had 25% more rain in three hours than we’d have normally in the entire month of July. [This is due to] all the thunderstorms and systems that moved through,” meteorologist Dave Phillips tells local news station CP24. Mr. Johnson says that parts of the city were hit with normal levels of rain. However, others were deluged with “hurricane amounts of water.”
Speaking with CP24 Tuesday, Environment Canada Senior Climatologist Dave Phillips says that while the city might typically see one or two thunderstorms with heavy rain in a month, Tuesday brought three in quick succession. The infrastructure does not have a design that can cope with this. “So, huge amounts of rain – the system, the city infrastructure, couldn’t take it. It was overworked. He pointed out that Toronto is “a different city” than it was about 20 or 30 years ago. It now has far more concrete surfaces and less green space that can absorb heavy rainfall.
Read more in our blog about the Toronto Basement Flooding Subsidy Program.
Could Toronto flooding have been minimized?
As Toronto deals with the aftermath, city manager Paul Johnson says the focus is both on clean-up and how to rebuild the city’s aging infrastructure in a flood-resilient way. A costly undertaking that would take years to complete. The challenge, Mr. Johnson adds, is doing this work while record-breaking storms continue to happen. He noted that Toronto had three 100-year storms in the last 11 years alone. This massive rainstorm is raising questions about Toronto’s preparedness when it comes to major weather events. The storm, which dumped a month’s worth of rain on the city in a matter of hours, overwhelmed sewer systems and waterways, causing damage and hampering transit.
Flood Mitigation Project
With more adverse weather expected due to climate change, the city has undertaken flood mitigation work over the past decade. This includes a massive project to reroute the mouth of the Don River to add flood protection in the Port Lands. This is a project that marks a major milestone just last week and is expected to be complete by the end of this year. But the fact that the city has undertaken flood protection work over the past few years left some wondering why Toronto was so overwhelmed by Tuesday’s storm.
The challenge is much of the city is not designed to handle this amount of water that is coming down,” City Manager Paul Johnson said in an update at City Hall on Wednesday. Johnson says while Toronto’s emergency management program had been activated before the weather event, the storm unfolded in unexpected ways. Johnson adds that while the city’s water treatment plants did have to go on “some form of diversion” on Tuesday, the water and sewage systems did not fail.
“Climate change is real and in fact, we’ve seen data that tells us these kinds of huge rainstorms are going to double in number in 15 years,” says Toronto Mayor, Olivia Chow.
Mayor Olivia Chow says flood mitigation is at various stages of work in areas across the city, with some projects still waiting for dollars to flow. “In the west area, some of those homeowners still can’t even get insurance for their basements because they’ve been flooding so much,” Chow says. “So, we’re waiting for the federal government to join us to do flood mitigation measures in the west end of the city. It’s about $300 million, and they’ve said yes, it’s just we’re waiting for the funds to flow.”
What does the Toronto flooding mean for your insurance?
The Insurance Bureau of Canada estimates the cost of the flood could easily surpass $1 billion, making it comparable to the 2013 Toronto flood — which was one of the 10 most expensive natural disasters in Canada. Insurers have been receiving claims for water damage to vehicles that were on the streets when they flooded, says Rob de Pruis, Insurance Bureau of Canada’s national director of consumer and industry relations. Some insurers have flood mitigation programs in place for homeowners who install backwater valves or sump pumps.
Adjusters tell Canadian Underwriter they’ve begun responding to an influx of claims. “We did see high volumes yesterday that lasted into the early morning hours. Volume started up again this morning as businesses opened up,” says Cortney Young, VP of platforms solution and Contractor Connection Canada, at Crawford. As for whether this flood can impact premiums, de Pruis says it’s not typical for one storm alone to weigh heavily on rates. “These types of events ultimately impact the overall claims costs which can impact future premiums. Now, one particular flood event does not automatically increase everyone’s premiums. The insurance industry is well capitalized for these types of events,” he says. “Where we see some challenges is, inflation, and replacement costs on people’s homes have been increasing significantly.”
Toronto flooding and Flood Insurance
It’s not surprising that flood insurance is becoming more common across Canada. Optional flood insurance is becoming more popular for homeowners across Canada, and more insurers offer it as extreme weather events like this week’s flood become more common. It is important to note that not all homes are eligible for Overland Water Coverage. If you live in an area that is considered to be a high-risk flood zone, it is likely not available.
The benefit of working with an isure broker is that we have various insurers at our fingertips, meaning we can look and find companies who can help you. If you are concerned about the possibility of water damage this flood season, why not contact isure? We have some of the best prices when it comes to premiums as well as customer service you can always rely on. Contact us or request a quote today!
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