Manitoba government looking to private sector for flood insurance scheme

Lori King, newly installed president of the Insurance Brokers Association of Manitoba, said government representatives approached the organization “to see if we can help move forward some sort of an insurance package for flood protection in Manitoba with the co-operation and involvement of insurance companies.”

Initial overtures came during the winter, when forecasts called for a severe flood season. As it turned out, unseasonably cool spring temperatures moderated the spring thaw and the Red River appears to be tamer this year.

But the government is still dealing with reparations – and lawsuits totalling $1.5bn – from the 2011 flood.

“So they came to us… and said, ‘Would you help us work with the insurance companies and figure out a solution to that we can partner with them in some way or another?'” Ms. King told Thompson’s.

“We’ve spoken to a variety of the insurance companies here in Manitoba, and some are very interested and some are not.”

Canadian insurers do not cover overland flooding because the only people who would buy it are those likely to incur damage, making it impossible to spread the risk adequately.

“We’ve looked at a few models they’ve used in the States, some of which have been completely unsuccessful, but we can learn from that too,” said Ms. King.

The government might act as a sort of reinsurer, covering insurers’ claims above a predetermined ceiling.

“There’s absolutely no question the insurance companies can do a better job with that than what’s been done. “The amount (the government has) spent on adjusting is outrageous.

“And I think that they would admit that that’s not the business they’re in. They don’t even have relationships with the people they need to have — demolition companies, assessors and builders– that the insurance companies have.”

More detailed talks on the subject are expected in the fall.