The Insurance Bureau of Canada is calling for the creation of a climate risk score that would indicate a property's susceptibility to damages caused by natural disasters.
The IBC says disclosure of natural hazard and climate risk is needed because of the increasing frequency and severity of extreme weather events.
The report released Tuesday is the result of a national group of representatives from across Canada's housing supply chain who were invited in 2021 to develop a framework to communicate these risks to homeowners.
The report calls on Canada to develop a universal climate risk disclosure system by 2025.
Craig Stewart, Vice-President of Climate Change and Federal Issues for the Insurance Bureau of Canada, wants homeowners and home buyers to know the risk they face and the steps they can take to protect themselves.
He says they need to come up with a score that people understand and that can be increased if they take certain measures.
"So they can actually see the improvement and as a result, the value of the home goes up, and potentially mortgage rates and insurance rates go down if that's improved," says Stewart.
He hopes the score would act as a disincentive to building in places like flood plains.
"If you have a rating system in place, it's going to be more difficult for developers to sell new homes that are going to score badly and buyers will be aware they scored badly, they'll know what they're getting into," says Stewart.
He says for those who are living in harms way and can't mitigate the risk, they need to be aware of that risk.
"That they are taking the measures necessary, for instance, not putting expensive items in their basement. They know, you know what, I can't protect this and I need to be ready in case a flood happens. There's always those types of defensive measures and alterations they can take," he adds.
The report also recommends that flood maps be updated and that a risk action matrix be created for lenders and insurers.
Stewart says access to reliable climate-related data will help homeowners, builders, financial companies and the government invest in resilience and adaptation projects.
With files from the Canadian Press