OTTAWA - Millions of Canadians living in many parts of the country could find their homes declared uninsurable, as the insurance industry grapples with skyrocketing water damage claims.

That's the grim future predicted by Blair Feltmate, chair of the Climate Change Adaptation Project at the University of Waterloo.

"That's going to be the harsh reality," Feltmate said in an interview Tuesday.

"In the absence of weather-hardening infrastructure, under the new extremes of climate change and extreme weather events, we are categorically heading towards an uninsurable housing market in Canada in many, many regions."

Feltmate's project, jointly funded by the university and Intact Insurance, is aimed at finding practical, affordable solutions to the challenges presented by climate change.

Over the past 15 years, Feltmate said studies have indisputably shown that the frequency and severity of extreme weather events across the planet have increased. In Canada, that's meant water damage has vaulted ahead of fire as the leading cause of property insurance claims.

Indeed, Feltmate said insurance companies are now losing money on water damage insurance — even though it covers only water that backs up into basements. And they're under mounting pressure to expand coverage to include the even more costly damage caused by "overland flooding" as well.

While most Canadians believe they're insured for flood damage, in reality Feltmate said Canada is the only G8 country in which property insurance does not include damage caused when water pours in through windows and doors — as was largely the case in southern Alberta over the past week.

Insurance companies are between a rock and a hard place. The potential cost of overland flood insurance is enormous but, at the same time, Feltmate said companies are aware there are repercussions for the industry's already dismal image in continuing to allow victims of devastating floods to "go apoplectic" when they discover they're not covered.

Moreover, if the industry doesn't deal with the issue itself, he said the government could impose a solution that is less palatable.

Immigration Minister Jason Kenney, the minister responsible for southern Alberta, strongly encouraged insurance companies on Monday to pay the claims of people whose homes were damaged by both backed up water and overland flooding, without being overly nit-picky about the exact cause of the damage.

In a survey last month of presidents and CEOs of the country's biggest property and casualty insurance companies, Feltmate and a colleague found agreement that overland flood insurance is an issue that must be addressed.

Insurance executives "know we have a problem and business as usual is not acceptable," he said, although there is no agreement as yet on how to address the issue.

As a first, urgent step, Feltmate said either the industry or governments must pay to develop up-to-date maps of flood plains in Canada.

After that, he said "we can start to say, okay, in these extreme regions of high potential for flooding, these will be designated as uninsurable markets, do not build there."

In areas with a lesser degree of vulnerability to flooding, insurance could be conditional on the infrastructure being "weather hardened" to reduce the risk of flood damage.

"We're talking about large sectors of Canada that could be potentially uninsurable," Feltmate said. "So we're talking millions (of Canadians effected), we're not talking 10,000 people in a city somewhere."

"In my opinion, this is one of the key problems facing the country today."

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  • Homeowner Eddy Marshall becomes emotional as he surveys the damage to his basement at his residence in High River, Alberta on Monday, July 1, 2013. A second wave of homeowners and business owners were allowed to return to the flood ravaged town since the disaster struck on June 20. THE CANADIAN PRESS/Jordan Verlage

  • Mike Sojer moves clothing and items from his family's clothing store as clean up work commences on downtown places of business in High River, Alberta on July 1, 2013. A second wave of homeowners and business owners were allowed to return to the flood ravaged town since the disaster struck on June 20. THE CANADIAN PRESS/Jordan Verlage

  • A resident walks past a motor boat lying in the street in High River, Alberta on Monday, July 1, 2013. A second wave of homeowners and business owners were allowed to return to the flood ravaged town since the disaster struck on June 20. THE CANADIAN PRESS/Jordan Verlage

  • Homeowner Eddy Marshall carries belonging from his basement at his residence in High River, Alberta on Monday, July 1, 2013. A second wave of homeowners and business owners were allowed to return to the flood ravaged town since the disaster struck on June 20.THE CANADIAN PRESS/Jordan Verlage

  • Mud and building contents litter the sidewalk as clean up work commences on downtown places of business in High River, Alberta on Monday, July 1, 2013. A second wave of homeowners and business owners were allowed to return to the flood ravaged town since the disaster struck on June 20. THE CANADIAN PRESS/Jordan Verlage

  • A pile of debris sits outside a Town of High River Municipal building as clean up work commences on downtown places of business in High River, Alberta on Monday, July 1, 2013. A second wave of homeowners and business owners were allowed to return to the flood ravaged town since the disaster struck on June 20. THE CANADIAN PRESS/Jordan Verlage

  • A volunteer's boots are caked with mud as clean up work continues on downtown places of business in High River, Alberta on Monday, July 1, 2013. A second wave of homeowners and business owners were allowed to return to the flood ravaged town since the disaster struck on June 20. THE CANADIAN PRESS/Jordan Verlage

  • Water surrounds homes in a flooded neighborhood in High River, Alberta, Canada on Saturday, June 29, 2013. The Alberta government is letting people who live in High River return to their homes in stages after being forced out by floods over a week earlier. (AP Photo/The Canadian Press, Jeff McIntosh)

  • Water floods a neighborhood in High River, Alberta, Canada on Saturday, June 29, 2013. The Alberta government is letting people who live in High River return to their homes in stages after being forced out by floods over a week earlier. (AP Photo/The Canadian Press, Jeff McIntosh)

  • A residents cleans up his home in High River, Alberta, Canada on Saturday, June 29, 2013. The Alberta government is letting people who live in High River return to their homes in stages after being forced out by floods over a week earlier. (AP Photo/The Canadian Press, Jeff McIntosh)

  • Water floods a neighborhood in High River, Alberta, Canada on Saturday, June 29, 2013. The Alberta government is letting people who live in High River return to their homes in stages after being forced out by floods over a week earlier. (AP Photo/The Canadian Press, Jeff McIntosh)

  • Waters flood a neighborhood in High River, Alberta, Canada on Saturday, June 29, 2013. The Alberta government is letting people who live in High River return to their homes in stages after being forced out by floods more than a week ago. (AP Photo/The Canadian Press, Jeff McIntosh)

  • Heaps of damaged goods pile up on High River streets, as residents are finally allowed to return.

  • Resident Christine Doefel wipes away tears as she leaves a reception centre after getting entry permits and clean-up kits from the Red Cross in High River, Alta., Saturday, June 29, 2013. The Alberta government is letting people who live in High River return to their homes in stages after being forced out by floods more than a week ago.THE CANADIAN PRESS/Jeff McIntosh

  • A Red Cross volunteer helps residents as they leaves a reception centre after getting an entry permit and a clean-up kit from the Red Cross in High River, Alta., Saturday, June 29, 2013. The Alberta government is letting people who live in High River return to their homes in stages after being forced out by floods more than a week ago.THE CANADIAN PRESS/Jeff McIntosh

  • Residents Christine Doefel, left, and her daughter Brooklynn Carney, embrace as the leave a reception centre after getting entry permits and clean-up kits from the Red Cross in High River, Alta., Saturday, June 29, 2013. The Alberta government is letting people who live in High River return to their homes in stages after being forced out by floods more than a week ago.THE CANADIAN PRESS/Jeff McIntosh

  • Residents leave a reception centre after getting entry permits and clean-up kits from the Red Cross in High River, Alta., Saturday, June 29, 2013. The Alberta government is letting people who live in High River return to their homes in stages after being forced out by floods more than a week ago.THE CANADIAN PRESS/Jeff McIntosh

  • Residents embrace as they leave a reception centre after getting an entry permit and a clean-up kit from the Red Cross in High River, Alta., Saturday, June 29, 2013. The Alberta government is letting people who live in High River return to their homes in stages after being forced out by floods more than a week ago.THE CANADIAN PRESS/Jeff McIntosh

  • A residents leaves a reception centre after getting an entry permit and a clean-up kit from the Red Cross in High River, Alta., Saturday, June 29, 2013. The Alberta government is letting people who live in High River return to their homes in stages after being forced out by floods more than a week ago.THE CANADIAN PRESS/Jeff McIntosh

  • Residents leave a reception centre after get entry permits and clean-up kits from the Red Cross in High River, Alta., Saturday, June 29, 2013. The Alberta government is letting people who live in High River return to their homes in stages after being forced out by floods more than a week ago.THE CANADIAN PRESS/Jeff McIntosh

  • Residents wait in line to get entry permits to the flooded town of High River, Alta., Saturday, June 29, 2013. The Alberta government is letting people who live in High River to return to their homes in stages after being forced out by floods more than a week ago. THE CANADIAN PRESS/Jeff McIntosh

  • Al Moore, a 42-year-resident of High River, listens to the radio broadcast on Friday, June 28, 2013 of the new re-entry plan for evacuees northwest of High River, Alberta. THE CANADIAN PRESS/Jordan Verlage

  • The Calgary flood as seen from space.

  • The Calgary flood as seen from space compared with a before-and-after photo.

  • Calgary mayor Naheed Nenshi, middle, and Calgary Stampeders president Gord Norrie, 2nd right, and others during pregame cerimonies honoring Alberta Flood Relief first responders and find raising efforts prior to CFL action between Calgary and BC in Calgary, Alberta on Friday, June 28, 2013. (CFL PHOTO - Larry MacDougal)

  • Calgary Stampeders Jon Cornish leaps with the ball during second half CFL action against the BC Lions in Calgary, Alberta on Friday, June 28, 2013. Cornish pledged $2,000 to Alberta flood relief immediately following the game. (CFL PHOTO - Larry MacDougal)

  • Cleanup continues on the Calgary Stampede grounds one week after major flooding in Calgary, Alberta on Thursday, June 27, 2013. The Elbow River flows by on to top and left, Saddledome is situated lower right and the chuckwagon track and rodeo grounds are top.

  • This photo provided by Transportation Safety Board shows a train with derailed tankers at the Bonny Brook bridge in Calgary, Alberta Canada on Thursday, June 27, 2013. The City of Calgary says conditions have stabilized at the site of the bridge collapse that caused six cars to derail and start sinking into the Bow River. Canadian Pacific Railway says five of the cars are carrying a petroleum product used to dilute raw oilsands bitumen. The city's acting fire chief has said crews are stringing a cable through the railcars and securing it to bulldozers on land. The industrial area near the bridge has been evacuated and booms are being deployed down river in case of any spills. There are no homes nearby, but several business are effected. (AP Photo/Transportation Safety Board via The Canadian Press)

  • Monica West carries damaged goods out of a souvenir shop as clean-up crews work at the Calgary Zoo in Calgary, Alberta, Canada on Tuesday, June 25, 2013. Heavy rains caused flooding, closed roads, and forced evacuations across Southern Alberta. Calgary Zoo staff risked their lives over the weekend to stop a hippo from escaping into the swollen Bow River. Director of animal care, conservation and research, Jake Veasey, says flood waters in the hippos' enclosure rose high enough during the floods for the dangerous herbivores to swim out. One hippo named Lobi was feeling particularly adventurous and was moving freely around the African Savannah building. Veasey had to break a window to get into the building and he swam in the muddy flood waters to find the animal. Zoo staff used cinder blocks and construction equipment to block Lobi inside the building. (AP Photo/The Canadian Press, Jeff McIntosh)

  • A muddied research book dries as clean-up crews work at the Calgary Zoo in Calgary, Alberta, Canada on Tuesday, June 25, 2013. Heavy rains caused flooding, closed roads, and forced evacuations across Southern Alberta. Calgary Zoo staff risked their lives over the weekend to stop a hippo from escaping into the swollen Bow River. Director of animal care, conservation and research, Jake Veasey, says flood waters in the hippos' enclosure rose high enough during the floods for the dangerous herbivores to swim out. One hippo named Lobi was feeling particularly adventurous and was moving freely around the African Savannah building. Veasey had to break a window to get into the building and he swam in the muddy flood waters to find the animal. Zoo staff used cinder blocks and construction equipment to block Lobi inside the building. (AP Photo/The Canadian Press, Jeff McIntosh)

  • A soldier walks by a pile of speedboats in High River, Alberta on Tuesday, June 25, 2013. High River was hit by a devastating flood on June 20 which caused a mass evacuation of the entire town although some residents chose to defy the order. Alberta's premier pledged $1 billion on Monday to help people recover from the floods. (AP Photo/The Canadian Press, Jordan Verlage)

  • A road crew foreman surveys the washed-out lanes of northbound MacLeod Trail in Calgary, Alta., Monday, June 24, 2013. Heavy rains caused flooding, closed roads, and forced evacuations across Southern Alberta. (AP Photo/The Canadian Press, Jeff McIntosh)

  • Clean-up crews work at the Calgary Zoo in Calgary, Alberta, Canada on Tuesday, June 25, 2013. Heavy rains caused flooding, closed roads, and forced evacuations across Southern Alberta. Calgary Zoo staff risked their lives over the weekend to stop a hippo from escaping into the swollen Bow River. Director of animal care, conservation and research, Jake Veasey, says flood waters in the hippos' enclosure rose high enough during the floods for the dangerous herbivores to swim out. One hippo named Lobi was feeling particularly adventurous and was moving freely around the African Savannah building. Veasey had to break a window to get into the building and he swam in the muddy flood waters to find the animal. Zoo staff used cinder blocks and construction equipment to block Lobi inside the building. (AP Photo/The Canadian Press, Jeff McIntosh)

  • Wreckage lies along Center Street in High River, Alberta on Tuesday, June 25, 2013. High River was hit by a devastating flood on June 20 which caused a mass evacuation of the entire town although some residents chose to defy the order. Alberta's premier pledged $1 billion on Monday to help people recover from the floods. (AP Photo/The Canadian Press, Jordan Verlage)

  • Calgary firefighters check on homes as residents and volunteers are in clean up mode in the community of Bowness as most of the homes have been pumped out with still some remaining submerged in water in Calgary, Alberta, on Monday, June 24, 2013. Alberta's premier pledged $1 billion on Monday to help people recover from floods that devastated parts of the western Canadian province. (AP Photo/The Canadian Press, Nathan Denette)

  • A road crew foreman surveys the washed-out lanes of northbound MacLeod Trail in Calgary, Alta., Monday, June 24, 2013. Heavy rains caused flooding, closed roads, and forced evacuations across Southern Alberta. (AP Photo/The Canadian Press, Jeff McIntosh)

  • Thaya Gallant

    Thaya Gallant helps with the flood clean-up at a law office in Calgary, Alta., Monday, June 24, 2013. Heavy rains caused flooding, closed roads, and forced evacuations across Southern Alberta. (AP Photo/The Canadian Press, Jeff McIntosh)

  • Calgary firefighters check on home as residents and volunteers are in clean up mode in the community of Bowness as most of the homes have been pumped out with still some remaining submerged in water in Calgary, Alberta on Monday, June 24, 2013. Alberta's premier pledged $1 billion on Monday to help people recover from floods that devastated parts of the western Canadian province. (AP Photo/The Canadian Press, Nathan Denette)

  • People watch as the river peaks, causing flooding in Medicine hat, Alta., on Monday, June 24, 2013. Officials in Medicine Hat said Monday they believe water levels on the South Saskatchewan River have peaked and that flooding won't be as severe as initially feared. Roughly 10,000 people were evacuated as the city of 60,000 prepared for the surge of water that swamped Calgary and surrounding areas last week. (AP Photo/The Canadian Press, Nathan Denette)

  • Residents and volunteers are in clean up mode in the community of Bowness as most of the homes have been pumped out with still some remaining submerged in water in Calgary, Alberta on Monday, June 24, 2013. Alberta's premier pledged $1 billion on Monday to help people recover from floods that devastated parts of the western Canadian province. (AP Photo/The Canadian Press, Nathan Denette)

  • Lisa Nguyen

    Resident Lisa Nguyen, right, cleans of the mud from photographs and negatives as volunteer Jacinta Babbitt, left, shows a clean picture of Nguyen when she was younger during flood clean up in the community of Bowness in Calgary, Alberta on Monday, June 24, 2013. Alberta's premier pledged $1 billion on Monday to help people recover from floods that devastated parts of the western Canadian province. (AP Photo/The Canadian Press, Nathan Denette)

  • Residents and volunteers are in flood clean up mode in the community of Bowness in Calgary, Alberta on Monday, June 24, 2013. Alberta's premier pledged $1 billion on Monday to help people recover from floods that devastated parts of the western Canadian province. (AP Photo/The Canadian Press, Nathan Denette)

  • Daniel Boddy, nine, helps with the clean-up work as hose lines from pumps drain water from flooded basement in the Bridgeland neighborhood in Calgary, Alta., Sunday, June 23, 2013. Heavy rains caused flooding, closed roads, and forced evacuation across Southern Alberta.

  • Daniel Boddy, nine, helps with the clean-up work as hose lines from pumps drain water from flooded basement in the Bridgeland neighborhood in Calgary, Alta., Sunday, June 23, 2013. Heavy rains caused flooding, closed roads, and forced evacuation across Southern Alberta.

  • A boy crosses a silt covered street in Chinatown as clean-up crews work in Calgary, Alta., Sunday, June 23, 2013. Heavy rains caused flooding, closed roads, and forced evacuation across Southern Alberta.

  • People place sand bags as the river rises rapidly and begins flooding in Medicine Hat, Alberta, on Sunday, June 23, 2013.

  • Homeowner Glenn Tibbles looks at the damage done by floodwaters to his home near downtown Calgary, Alberta, on Sunday, June 23, 2013. About 65,000 residents of Calgary were being allowed to return to their homes Sunday to assess the damage from flooding that has left Alberta's largest city awash in debris and dirty water.

  • Cpl. Brett Martens from CFB Edmonton helps a resident clear out damaged debris from their home near downtown Calgary, Alberta, on Sunday, June 23, 2013. About 65,000 residents of Calgary were being allowed to return to their homes Sunday to assess the damage from flooding that has left Alberta's largest city awash in debris and dirty water.

  • A home is inundated with floodwaters on the Siksika First Nation, Alberta, on Sunday, June 23, 2013. Alberta's municipal affairs minister says 27 communities are under a state of emergency as some areas begin to recover from flooding while others are still bracing for it.

  • People watch as the river rises rapidly and begins flooding in Medicine Hat, Alta., on Sunday, June 23, 2013. THE CANADIAN PRESS/Nathan Denette

  • Floodwaters inundate homes in Medicine Hat, Alberta, on Sunday, June 23, 2013. Alberta's municipal affairs minister says 27 communities are under a state of emergency as some areas begin to recover from flooding while others are still bracing for it.