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Heavy rain in Nova Scotia in November caused flooding that submerged roads and homes such as this one, near the Clyde River. ((Mike Dembeck/Canadian Press))

Canadian insurance companies are facing unprecedented growth in claims and payouts for water-related home damage, and industry experts lay the blame squarely on climate change.

In 2009, insurance payouts nationwide totalled $5.3-billion, with more than half of claims being paid for extreme weather events.

Heavy rainfall causing flooded basements was the main culprit, costing the insurance industry $1.3-billion in 2009.

'For most of the country, the infrastructure is not built for the climate that we are now starting to see.'—Brock Carlton, CEO, Federation of Canadian Municipalities

For many years, fire damage was the most expensive cost for companies, according to the Insurance Bureau of Canada.

But 10 years ago, water damage claims started to increase, until 2005 when they surpassed fire costs.

Today, the bureau reports that water damages account for more than half of all insurance claims.

"Now that comes from, of course, the washing machine that break down, but it's also the fact that the municipal infrastructure has not been designed to withstand what we are experiencing, and the fact that the climate has changed," says Robert Tremblay, research director at the bureau. 

While world leaders and UN bureaucrats discuss strategies for reducing greenhouse gas emissions, Canadians are already feeling the effects of climate change, including flooded basements after heavy rain.

That means cities and citizens need to adapt, says the Federation of Canadian Municipalities (FCM).

 The Insurance Bureau of Canada offers tips on protecting against water damage.  

"For most of the country, the infrastructure is not built for the climate that we are now starting to see," argued Brock Carlton, the federation's CEO.

The FCM wants a national discussion on how cities have to adapt to the new vagaries of weather, and it's up to federal and provincial governments to take the lead on that conversation, Carlton says.

"Climate change is on our front steps. It's in our communities. We see it. We have to adapt. We can't wait for some global agreement and we can't just try to reduce greenhouse gas emissions only."

New reality means heavy rain, extreme weather

As for the science of climate change, the increase in the severity of extreme rain events is undeniable, environment experts say.

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Steve Butler's basement was flooded twice in an 18-month period, costing him $7,000. ((Photo submitted by Steve Butler))

Climate modelling research has found that on a global scale there is a steady upward trend in heavy precipitation, according to Dr. Francis Zwiers, director of the Pacific Climate Impacts Consortium, and former director of Environment Canada's climate research branch.

"That means, you know, additional flooding [and] more frequent events when people will have to mop out their basements," says Zwiers.

Basement woes

Saint John, N.B., resident Steve Butler says his experience with basement flooding has forced him to be more assertive about protecting his Millidgeville-area home.

"The climates are changing and the storms are getting increasingly worse and that's something you really can't do anything about," said Butler, who bought his home in 2000 and lives there with his wife Rose.

"But what can you do to combat that? Well, to me you have to be somewhat proactive."

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Butler had extensive work done to protect his home from future flooding, and saw his insurance deductibles rise. ((Photo submitted by Steve Butler))

"You have to say, OK, we have to take some steps to look ahead."

In February 2008, a freezing rain storm flooded Butler's basement, requiring renovation work that included the installation of a back-flow valve on his home's wastewater pipe.

Butler's insurance company — Allstate —  paid for some of the work, but he ended up handing over $2,000 of his own money to complete the plumbing.

His basement flooded again in August 2009, after heavy rain overwhelmed his new back-flow valve.

Butler installed a $5,000 lift-station, that he paid for out-of-pocket. When it came time for him to renew his house insurance, Allstate turned him down for flood and water back-up coverage.

Butler still has house insurance, but his deductible has more than doubled, from $1,000 to $2,500. He also has no financial protection for future flooding.

Every rain storm now brings a sleepless night, said Butler, but so far the lift station has kept him high and dry.