When the couch in the basement floats due to a flood, the despair and stress linger far longer than the brown water.
Published at 7:00 p.m.
However, the mental health ramifications following disasters rarely make the headlines. The challenge lies in quantifying these effects, even though experts are employing innovative mathematical models to do so.
We already know that the deluge that struck Ontario in mid-July will cost property and casualty insurers more than $940 million. In Quebec, the unprecedented rainfall on August 9 resulted in 70,000 claims, leading to multi-million dollar bills for insurance companies… and higher premiums for all.
As staggering as these figures are, they only reflect a small portion of the expenses linked to floods and other natural disasters, since the mental health of those affected is likely to be as severely impacted as their belongings.
Psychological distress, post-traumatic stress, anxiety, insomnia, financial insecurity, frustration with waiting times, family strife, inability to work… the effects on well-being are profound, which can lead to the need for medication or even a work stoppage.
In other words, floods, which are becoming more frequent with climate change, are also straining group insurance plans that cover medication and compensate salaries during illness. Public drug insurance (RAMQ) is certainly not exempt from this impact.
What is remarkable is that researchers are successfully translating the psychological consequences of traumatic events such as floods into monetary terms. One such researcher, Michaël Bourdeau-Brien, is a professor in the Department of Finance, Insurance, and Real Estate at Laval University. I attended a very enlightening conference he delivered on this topic in the spring. I was reminded of him after witnessing the distress on the faces of victims following the rupture of a water main at the foot of the Jacques-Cartier Bridge on television.
The 196-page study1 that he co-directed on the impacts of the 2019 floods in Quebec presents disturbing testimonies from victims in Sainte-Marthe-sur-le-Lac that reveal much about their psychological state.
Some testimonies taken from the study
- “We both experienced post-traumatic shock; my usually unshakeable husband was deeply affected and required medication.”
- “I think I hit rock bottom during that time. Yes, I had never felt that way before.”
- “So yes, it had psychological effects on us, and ultimately led to the separation in our marriage.”
- “I was unable to sleep for months; it took me two or three months to finally rest […] I constantly dreamed that my children fell into the water through the windows of the house.”
- “Yes, it was psychological: a severe depression.”
Using sophisticated econometric models, researchers determined that taking on debt after a disaster doubles the likelihood of experiencing depression. Their most striking revelation is that the financial value of intangible damages can be as significant, if not nearly equal, to that of material damages.
PHOTO PROVIDED BY MICHAËL BOURDEAU-BRIEN
Michaël Bourdeau-Brien, professor in the finance, insurance and real estate department at Laval University
“On average, and this average is significant, someone with $100,000 worth of property damage likely experiences an equivalent loss in productivity, mental health impacts, and enjoyment of life, amounting to another $100,000. This illustrates the substantial nature of this damage. It is not trivial,” states Mr. Bourdeau-Brien.
This is so significant, in his opinion, that if disasters become more frequent and severe, it may lead to concerns regarding the sustainability of public and private health insurance programs. One thing is certain: someone will have to bear the cost. As a result, group insurance may become more expensive due to extreme weather events.
Personal insurers are aware of this issue and are monitoring it “very closely,” as confirmed by their association (ACCAP), even if they currently lack studies proving that climate change has a “significant impact” on their industry.
Beyond insurance, there are other compelling reasons to assess the financial impact of psychological consequences. One such reason is to enhance decision-making regarding investments in public infrastructure like sponge parks or retention basins. By solely considering quantifiable impacts, the cost-benefit analysis becomes “biased,” potentially resulting in the rejection of beneficial projects, explains Michaël Bourdeau-Brien.
What a vicious cycle! By overlooking the psychological impacts caused by natural disasters, we risk dismissing solutions that help prevent water from entering homes.
1. Consult the study
Understanding the Psychological Impact of Flooding and Natural Disasters
When the basement couch floats because of a flood, the despair and stress take a lot longer to fade than the brown water.
Published at 7:00 p.m.
The Hidden Cost of Natural Disasters
Yet the mental health bill after disasters doesn’t make headlines. The problem is that it’s much harder to quantify, even though experts are doing it with innovative mathematical models.
We already know that the deluge that hit Ontario in mid-July will cost property and casualty insurers more than $940 million. In Quebec, the record amount of rain on August 9 led to 70,000 claims, which should turn into multi-million dollar bills for insurance companies… and higher premiums for everyone.
As astronomical as these figures are, however, they only represent a fraction of the costs associated with flooding and other natural disasters, since the mental health of those affected is likely to be just as damaged as their furniture.
Health Consequences: A Deep Dive
Psychological distress, post-traumatic stress, anxiety, insomnia, financial insecurity, frustration with waiting times, family conflicts, inability to work… the consequences on well-being are serious, which can force the taking of medication or cause a work stoppage.
In other words, floods that are increasing with climate change are also putting pressure on group insurance plans that reimburse medications and compensate salaries in the event of illness. Public drug insurance programs are obviously not left out.
Academic Insights Into Psychological Damage
What is impressive is that academics are managing to translate the psychological impact of brutal events like a flood into dollars. One of them, Michaël Bourdeau-Brien, a professor in the Department of Finance, Insurance and Real Estate at Laval University, sheds light on this from an innovative standpoint.
The 196-page study he co-directed on the impacts of the floods that occurred in Quebec in 2019 reveals disturbing testimonies of victims of Sainte-Marthe-sur-le-Lac that capture their psychological state.
Victim Testimonials: The Human Side of Flood Consequences
Some testimonies taken from the study
- “We both had post-traumatic shock, my husband who is unshakeable was really affected, medicated.”
- “I think I hit rock bottom there. Yeah, I’ve never been there before.”
- “So yes, it had psychological consequences for us and in any case, it led to the eventual separation of our married life.”
- “I didn’t sleep anymore actually, it took me two or three months before I was able to sleep […] I always dreamed that my children fell into the water through the windows of the house.”
- “Yes, psychological: a damn good depression.”
Quantifying the Intangible: Economic Approaches
Using sophisticated econometric models, researchers found that taking on debt after a disaster doubles the prevalence of depression. Their striking discovery states that the financial value of intangible damage can be as great, or nearly so, as the value of material damage.
PHOTO PROVIDED BY MICHAËL BOURDEAU-BRIEN
Michaël Bourdeau-Brien, professor in the finance, insurance and real estate department at Laval University
“On average, and the average is important here, someone who has $100,000 worth of damage to their property, there is a good chance that in terms of loss of productivity, impacts on their mental health, and their enjoyment of life, they will also have the equivalent of another $100,000. This is to show how significant this damage is. It is not anecdotal,” says Mr. Bourdeau-Brien.
Insurance Implications: The Broader Economic Impact
This is so significant that if disasters become more frequent and severe, there will be “questions about the viability” of public and private health insurance programs. One thing is certain: someone will have to foot the bill. Group insurance may therefore cost more because of extreme weather conditions.
Personal insurers are aware of the issue and are monitoring the situation “very closely,” confirmed through their association (ACCAP), even if, at present, they do not have studies showing that climate change has a “significant impact” on their industry.
Practical Tips for Personal and Community Resilience
- Stay Informed: Regular updates from trusted sources help people understand upcoming weather conditions.
- Emergency Preparedness: Create plans and kits to ensure safety and readiness during floods.
- Mental Health Support: Encourage open dialogue about mental health, accessibility to counseling services, and community support systems.
- Community Engagement: Participate in local resilience-building initiatives, such as designating flood zones or building retention basins.
The Role of Public Infrastructure in Mitigating Flood Damage
Beyond insurance, there are other good reasons to calculate the cost of psychological consequences. One of them is to improve decision-making when investing in public infrastructure such as sponge parks or retention basins. By only considering quantifiable impacts, the cost/benefit analysis becomes “biased,” potentially leading to the rejection of excellent projects, explains Michaël Bourdeau-Brien.
What a vicious circle! By ignoring the psychological impacts caused by natural disasters, we risk ruling out solutions that prevent water from entering homes.