Fort McMurray wildfires to cost governments and insurers more than $5 billion

Canada News Wire
News release
Ottawa, Nov. 15 – $5.3 billion will be re-invested in Alberta’s economy over the next three years to rebuild Fort McMurray following the devastating wildfires in May 2016, according to a Conference Board of Canada report on the economic impacts of Canada’s most costliest natural disaster.

“A massive injection of funds from provincial and federal governments, insurance companies and private sources will go towards the cleanup and rebuilding effort in and around Fort McMurray,” said Pedro Antunes, Deputy Chief Economist. “The wildfires will leave a sizeable dent in public finances, while property and casualty insurers will have to absorb the massive cost of claims.”

The lion’s share of the $5.3 billion will be absorbed by the insurance industry, which is estimating $3.6 billion in claims. In contrast, the federal and provincial governments covered the majority of payments in the 2013 Alberta floods. This is because flood insurance for residences was unavailable in the province and elsewhere in the country, while fire insurance coverage is almost universal.

As a result of the wildfires, an estimated 1,935 residential and 23 commercial/industrial structures were damaged or destroyed and more than 12,000 auto claims are expected. Close to 45,000 claims are expected to be processed at an average payout of almost $80,000. Initial estimates from
Insurance Bureau of Canada suggest that commercial property claims will total $1.2 billion.

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