This story is part of a package of special coverage of climate change issues by CBC News leading up to the United Nations climate change conference (COP21) being held in Paris from Nov. 30 to Dec. 11.

The insurance industry has been hit by mounting claims from extreme weather, and for years now it has pointed out that the real costs associated with climate change are already with us.

In the past decade, insurers have come to see that the only way to handle the changes ahead is to find ways to limit their costs, according to Craig Stewart, vice-president of federal affairs for the Insurance Bureau of Canada.

"The property and casualty insurance industry has been on the front lines of this," Stewart told CBC News. "For the industry, climate change is a priority. We're working with every level of government to try to impress preparedness."

The difference after 2013 — the year of catastrophic flooding along Alberta's rivers and a huge summer storm that flooded parts of Toronto — is that policy-makers actually started to listen.

That's the year the federal government had to write a cheque to Alberta for $2.8 billion for flood damage, to partly compensate for damage of more than $6 billion.

The property and casualty insurance industry paid out $1.7 billion in claims in Alberta alone that year — while claims in southern Ontario from severe weather totalled $1.1 billion — a total of $3.4 billion in claims from catastrophic weather events for the year. Previously the worst weather event was the 1998 ice storm, which resulted in $1.6 billion in claims.

That contrasts with 1983, with total "catastrophic loss" claims of $82.8 million for the entire industry, 1993, with total claims of $328 million, and 2003, with claims of $519 million.

catastrophic loss claims

Flooding from extreme weather

Overwhelmingly, the costs of climate change come from flooding, as storms bring higher levels of rainfall and rivers overflow from sudden spring melts and heavy rain. Ice storms and fires also cause damage, but the main concern is floods.

Public Safety Canada approached the Insurance Bureau of Canada (IBC) about addressing flood risk last year, and the result has been an effort to design a public-private insurance mechanism that would cover the 10 per cent of Canadian properties that are at risk of repeated flooding, Stewart said.

"We need a solution whereby we [private-sector insurers] will insure 90 per cent of properties without assistance, and we work together with the federal government for the last 10 per cent," he told CBC News.

Stewart expects that solution within the coming year. Will off-loading the risky 10 per cent mean the rest of us pay less? It depends on how the plan is designed.

"IBC's position is that people who live in higher-risk zones should not be subsidized by those who don't," Stewart said.

Determining who are the 10 per cent at risk depends on accurate flood maps, but Canadian flood maps have not been updated for 30 to 40 years. So the IBC has  paid for new maps, in a $7-million project that should be finished by year-end.

Improve urban infrastructure

The other main goal in the insurance industry's attempt to adapt to climate change is mitigating the cost of claims from flood damage, by encouraging improvements in urban planning and upgrading aging infrastructure. The industry has been working with municipalities for several years on ways to manage storm water.

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Aging infrastructure can break and cause damage. Municipalities are seeking ways to use their dollars most efficiently for repair and replacement. (Hans van der Zande/CBC)

"At the municipal level, we're looking at land-use planning. Cities can use zoning to avoid development in flood plains," Stewart said. That nice home by the river might be better off further back, with a "green zone" in the lowest-lying areas.

The industry has also funded a pilot for a municipal risk assessment tool in three cities to help planners decide where to put their dollars when they upgrade storm sewers and storm-water infrastructure. The tool helps cities identify parts of their system at greatest risk for flooding.

"By understanding risk assessment, municipalities are able to prioritize infrastructure spending," Stewart said, adding that the IBC is now looking at ways to offer that tool to Canada's 5,000 municipalities.

Stewart said the insurance industry welcomes the current federal government's plan to fund infrastructure, as it will give municipalities the case they need to rebuild storm-water management systems.

Research into building standards

The insurance industry also plays a role in funding the Institute for Catastrophic Loss Reduction at the University of Western Ontario, which identifies effective practices for protecting buildings from damage. And here the industry's reach extends right down to homeowners, who can take steps to protect their own property.

The university institute met with Alberta's premier and recommended limiting construction close to rivers and revising the Alberta building code so homes would be less susceptible to damage, said managing director Glenn McGillivray.

"It became evident in Alberta they were allowing construction in the flood plain. New subdivisions were going up," he told CBC.

The institute met with limited success on that score — many of the homeowners affected by 2013 flooding opted to rebuild, but it was able to recommend redesign of homes so there were garages at the lower level and new materials in basements.

But some homeowners also took the initiative to keep expensive home furnishings and theatre systems out of lower-level rooms.

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The basement may not be the best place for an expensive home-theatre system if you live in a flood zone. (Todd Korol/Reuters)

In a recent report, the institute monitored some cities' efforts to get homeowners to help. Saskatoon and Moncton, N.B., have incentive programs for homeowners to install sewer back-valves, which prevent floodwaters from coming up through the sewer.

Quebec City and Toronto have ordered homeowners to disconnect downspouts from the sewer system so it is not overtaxed in heavy rain. Boucherville, Que., installed wet and dry ponds to retain storm water in a new subdivision.

"The flooding in 2013 helped to push awareness along regarding flood plains," McGillivray said.

"Cities are going out to engage their citizens. It's not just infrastructure, homeowners also have to take measures to protect their property."