ABBOTSFORD – In the days before an atmospheric river struck the Fraser Valley last December, dairy farmer Matt Dykshoorn was already on the move.
Following a previous flood in 2021, Dykshoorn had protocols in place to protect his stock and equipment. Young cattle were moved from the lower barn, and equipment was relocated to a higher ridge before floodwaters poured across the area.
While the flood caused an estimated $74 million in insured losses in the Fraser Valley, the Dykshoorns’ loss was minimal.
“We’re in a known unprotected floodplain, so it’s deemed high risk,” says Dykshoorn, general manager of B&L Dairy Farm. “It makes us hypersensitive to weather forecasts, and we have to have a plan to protect ourselves. We have to be smart about managing our risks.”
Huge challenges
Weather-related disasters like drought, flooding and wildfires are posing huge challenges – and higher costs – for BC farmers, especially when it comes to insurance.
A rising number of claims, higher building replacement costs, lagging infrastructure investments – such as stormwater upgrades and outdated building codes – all influence the price farmers have to pay to protect themselves. In some cases, farmers can’t get insurance, while others struggle to afford coverage.
“I’m hearing daily from people who are finding it increasingly difficult to have their coverage placed, the coverage is inadequate, or the coverage is rising with no consultation or explanation of what’s going on,” says Anna Warhurst, who works for Co-operators on Vancouver Island.
“A lot of the time, we’re counselling clients on taking higher deductibles to offset premiums because, unfortunately, gone are the low-insurance days with the $200 or $500 deductible. We’re having a lot more risk management, coverage tailoring and use of deductibles than we ever had in the past.”
Weather playing bigger role
Insurance Bureau of Canada national director of consumer and industry relations Rob de Pruis says insurance costs are influenced by a variety of factors, but weather-related risks are playing a bigger role these days due to higher claims over the past decade.
Between 2000 and 2010, for instance, the insurance industry paid out an average of $700 million per year in severe weather damage in Canada. In comparison, that figure has increased over the past decade to an average of over $2 billion per year.
Some years are worse than others: 2024, for instance, was a record year for severe weather claims at $9.4 billion.
Record-setting damage means record-setting losses for insurance companies, which in turn could result in restrictions or caps on premiums.
“All of a sudden that risk gets transferred to us,” Dykshoorn says. “It’s become increasingly concerning to us farmers.”
The situation could get worse. At the end of March, the Canadian Drought Monitor found 49% of BC’s agricultural lands were classified as abnormally dry or experiencing severe drought. Data from property data analytics firm Landcor Data Corp. suggests such hotspots for weather-related events and alerts in BC are the Okanagan, Fraser Canyon, Kootenays and Thompson-Nicola, from Lillooet and Lytton to Kamloops.
Despite three floods and a recent barn fire, Dykshoorn says it hasn’t been a hassle so far to get farm insurance, although premiums have continued to climb.
The Dykshoorns’ mature milk cows, for instance, are insured at a replacement value of $5,000 a head, a value that’s gone up as cattle prices have soared over the past five years.
“Our insurance has gone up significantly in the past five or six years,” Dykshoorn says. “To date, we haven’t had to fight to get it, but I have heard from farms that have had major claims, and it becomes a real challenge.”
BC Agriculture Council policy director Paul Pryce says BCAC is also fielding reports about insurance, particularly the “ever-growing” number of exemptions or exceptions in policies.
This could include requirements for setbacks of farm structures from a watercourse, which could affect existing farms located at the elbow of a river.
“What may have been a 30-page insurance policy is rapidly becoming a 200-page insurance policy document,” Pryce says. “If the exceptions continue to grow, is the insurance there for you when you need it? Sometimes it’s difficult for a producer to wade through all those exceptions. And sometimes they may not realize they are not fully covered until the disaster hits.”
The situation is compounded by the fact the province is budgeting less for crop insurance, Pryce says, not to mention emergency management and climate resilience programs.
“We don’t know if that was a case of being a bit optimistic that there wouldn’t be a lot of insurance payouts or if it was a case of signalling the ministry would maybe be more strict in adjudicating insurance claims,” he says, “but we would like a situation where producers are compensated for losses so they’re not being unduly hassled when it comes to these things.”
Funding needed
Last month, Opposition agriculture critic and Delta South MLA Ian Paton called on the province to fund its flood strategy, saying “it’s needed now more than ever.”
The province says there continues to be several programs available to farmers to deal with flooding, while long-term work is underway to prepare for the future, including the $20 million Fraser Valley Flood Mitigation Program.
It acknowledges the base budget for the Ministry of Emergency Management and Climate Readiness is $4.7 million less compared to last year, but notes “this has not resulted in a cut to services or programs for people and communities responding to or recovering from emergencies.”
Meanwhile, both de Pruis and Warhurst recommend farmers review their policies on a regular basis to make sure they have the coverage they need. Pricing of insurance in BC is risk-based, so the higher the risk level, the higher the premium.
De Pruis says farmers can also take action to protect their properties, such as FireSmarting their lands. Before the 2016 wildfire in Fort McMurray – Canada’s costliest wildfire – there were specific rates for insurance in that community, de Pruis says. Despite the damage, insurance rates have since decreased due to the burned fuels and the work the community did on wildfire mitigation.
“The best thing a farmer or business owner can do to make sure their insurance premiums remain stable is to do a full risk assessment on what they need for insurance,” de Pruis says. “Make sure you’re reducing or eliminating the chance of claims. That will attract the best rates.”
Dykshoorn says despite the cost of insurance, it’s better to have it than not – as he found out with a recent barn fire.
“As expensive as insurance is, you’re still ahead if you ever need to make a claim,” Dykshoorn says. “We had a long stretch where it wasn’t a concern, but that’s definitely changed now.”
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Quesnel farm grows one venture at a time