It's safe to say that consumer perception of risk is rising as flooding and wildfires are becoming more common and expanding their reach and intensity. Homeowners living in those high-risk areas are facing a steep devaluation of their properties, not just from the reputation risk and physical damages, but also from the lack of affordable or attainable home insurance.
We see insurers blacklisting entire postal codes and refusing to underwrite any new mortgages. This potentially freezes local markets, stripping Canadians of their home equity. Depending on the situation, yes, it devalues properties. It creates risk for longer-term sustainability of household finance, as people look to take their asset that they have invested in and find that, at the end of the day, it's not going to achieve their financial goals.