Fort McMurray fire costliest disaster in Canadian history

Friday, July 8, 2016, 2:28 PM - The Insurance Bureau of Canada (IBC) says the massive wildfire that ravaged Fort McMurray in May is the most expensive disaster for insurers in Canadian history with losses expected to total $3.58 billion.

The amount is double the insured losses from the 2013 southern Alberta floods, which was the second costliest disaster at $1.7 billion in damages. The first had been the 1998 ice storms in Quebec at $1.9 billion, according to the bureau.

Here's a numerical breakdown of insurance claims from the Fort McMurray wildfire:

• 27,000: Number of personal property claims, averaging $81,000 each
• 12,000+: Number of auto insurance claims, averaging $15,000 each
• 5,000: Number of commercial insurance claims, averaging over $227,000 each

"This wildfire, and the damage it caused, is more alarming evidence that extreme weather events have increased in both frequency and severity in Canada," said Don Forgeron, president and CEO of the IBC in a press release. "As a country, we need to take a more disciplined and sustained approach to helping prepare Canadians for fires and floods. We must build a more resilient country to better protect those affected by the very real impacts of our changing climate. By taking action now, we can minimize costs to taxpayers and better equip homeowners for the risks and challenges that lie ahead."

Toronto-based Catastrophe Indices and Quantification Inc. (CatIQ) – a sister company to MSA Research Inc. – works with insurers to aggregate industry losses. Below is the top five costliest disasters based on their database, which goes back to 2008.

Alberta Wildfire officials said Tuesday the massive wildfire, first discovered May 1, was officially listed as under control as of Monday morning.

Wildfire information officer Laura Stewart told CBC the fire's downgrade in status could be attributed to firefighters' efforts, cooler temperatures and a few doses of rain.

"Under control" doesn't mean the fire is extinguished. Stewart told CBC said firefighters continue to look for surrounding hotspots, and it could take until next year to completely quench the flames.

After it was first discovered, the fire escalated quickly, to the point where it quickly crossed the boundaries of Fort McMurray and forced the evacuation of the entire city, with some 88,000 people fleeing north and south. Although no one was killed as a result of the fire, two people died in a collision during the exodus.

Unseasonally high temperatures and bone-dry terrain, coupled with winds and a lack of snowpack from the previous winter, made the fire especially difficult to control, though a shift in the wind did eventually send it moving slowly away from the city. As of July 4, it has burned around 590,000 hectares.

In the city itself, some neighbourhoods suffered as much as 90 per cent damage, and in all, some 2,400 structures were destroyed by the fire, or about 10 per cent of the city. 

As the fire was burning in the heart of Alberta's oil country, its long-term economic impact to the province and the country is still bring worked out. Oilsands analysts estimated the fires could cost the oil industry some $1.4 billion, according to Global News. There are no recent figures for the general insurance costs, but those are expected to run in the billions as well.

The city's evacuees were out of their homes for about a month before a controlled return began on June 1. 

WATCH BELOW: A 360 degree view from Fort McMurray

SOURCES: CBC | Global | CatIQ