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Displaced by flood, couple hopeful new insurance will cover extensive damage

The Evanses first sought flood insurance in 2008

Rachel Cave · CBC News

A retired couple in Grand Bay-Westfield is hoping a new home insurance product they purchased ahead of this year’s flood will make their recovery easier.

Jim and Betty Evans started asking about flood insurance after the St. John River crept up to their doorsill in 2008.

It wasn’t available then.

The Evanses picked through the flood damage Monday to see what can be salvaged. (Brian Chisholm/CBC)

But a few years ago, some companies started offering overland water coverage, available to homeowners who qualified and at an additional price.

“Because we’d been through this before, we thought we’d better have it,” said Betty, 78.

The Evanses have been racking up expenses since floodwater closed Riverside Park, the street where they’ve lived for 25 years.

Jim and Betty Evans, who have lived in their Grand Bay-Westfield riverside home for 25 years, say this year’s flood was the highest they’ve seen by far. (Brian Chisholm/CBC)

On Monday, they had no power, no running water and were staying at a hotel.

They’re hoping their bills will be reimbursed, but they say they’re not entirely sure what their policy covers.

“We’re a little foggy on how extensive it is,” said Jim.

No industry standard

The Insurance Bureau of Canada said only 10 to 20 per cent of insurance companies provide any form of flooding insurance.

They can set their own prices and their own terms, said Marlene Landry, IBC’s Atlantic manager of consumer and industry relations.

“What each company will sell, how they’ll sell it and what the product contains is all different,” said Landry.

“There is no industry standard.”

The Evans’s water pump will be need to be replaced. It’s among many fixtures and appliance lost to the flood.(Brian Chisholm/CBC)

Landry said insurance companies keep years of information on claims and they know their risk zones.

That’s why the location of your house will affect what you pay and whether you can purchase flooding protection at all.

“Yes, there’s going to be cases, many cases possibly, where you couldn’t purchase overland flooding because of where you live,” she said.

Betty Evans clears water-damaged items from her home in Grand Bay-Westfield. (Brian Chisholm/CBC)

IBC said insurance companies have not yet reported on how many New Brunswickers have opted into the coverage since it was introduced in 2015.

As for how much claims will cost from the flood of 2018, Landry said that information may not be available for some time.

“As far as when the information will be available to us as to how much this cost as an industry, I’m going to hazard to say maybe a year or more.”

 

Distracted driving-related accidents rise dramatically, Aviva Canada claims data shows

Despite a significant increase in penalties and fines, Aviva Canada continues to see a trend of increased claims linked to distracted driving*.

Aviva Canada assessed the number of distracted driving-related claims from 2016 to 2018. It found:

  • The highest percentage increase was in Alberta, where distracted-driving related accidents jumped 58 per cent;
  • The national increase for Canada was 23 per cent;
  • Atlantic region saw an increase of 8 per cent;
  • Ontario saw an increase of 12 per cent;
  • The Greater Toronto Area saw an increase of 18 per cent and;
  • Quebec saw an increase of 34 per cent.

Sadly, most of these vehicle accidents are entirely preventable.

“Despite increased penalties and awareness on this issue, too many Canadians are still driving distracted behind the wheel. The majority of these accidents are preventable – such as hitting stationary objects, rear ending other vehicles and inattentive lane changes,” says Phil Gibson, Chief Underwriting Officer at Aviva Canada. “We created the Undistracted Driving campaign because nobody likes to be nagged about their bad behaviour. Instead, we want to encourage all drivers to keep our roads safe, and we have everything we need to start Undistracted Driving today.”

New Videos

As part of the new campaign, Aviva Canada conducted an experiment involving three Canadian drivers – two Aviva Canada employees and one broker – to see what it would take to start “Undistracted Driving“.

Equipped with cameras in their cars, Aviva Canada asked a mother with young children, a busy working professional, and a millennial not to use any devices in their car for an entire week and filmed what happened next.

“I definitely felt like I was more present and more attentive. I was really able to focus on the task at hand rather than trying to stay connected with everybody,” said one of the participants, business professional Ian Foo.

Said participant Kimmy Coote, a busy mother of two young boys: “Having had this experience, we talked about doing our next road trip without using any technology at all. We think it’s good to detox. It’s good to disconnect and just spend that quality time together as a family.”

See the undistracted driving experiment video here.

Aviva Canada offers these quick tips to encourage Canadians to make roads safer and start Undistracted Driving:

  • Prepare your music playlist, podcast, or audio book ahead of time;
  • Keep your phone out of reach;
  • Enable your phone’s Do Not Disturb While Driving feature;
  • Avoid eating while driving;
  • Take the time to master your car’s voice commands;
  • Keep pets safely secured in the back seat or in a crate;
  • Prepare for your drive before you leave.

An overwhelming 95 per cent of Canadians say texting and driving by others makes them feel unsafe on the roads, according to an Aviva Canada public opinion poll of Canadians released last Fall.

Furthermore, 88 per cent of Canadians have witnessed other drivers texting while behind the wheel. Almost 4-in-5 Canadians (78 per cent) said they want to see a technology solution that would stop distracted driving by disabling texting and other functions while the driver is behind the wheel.

Notes to editors:

  • *Distracted driving-related accidents are difficult to prove without drivers admitting complete fault. Aviva Canada’s claims data that support the increase in distracted driving-related accidents are what Aviva Canada estimates based on cause of claim. This assessment includes cause of claims frequently linked to distracted driving such as: rear end impact, vehicles changing lanes, improper passing, lost control, collision with fixed object, failure to obey stop sign, failure to obey a traffic light, failure to obey a yield sign, hit and run, parked car struck, and a single vehicle accident. Cause of claims rarely linked to distracted driving were excluded from the assessment such as: theft, vandalism, glass breakage, backing up, left turn, falling object, impact with animal, hail/wind, fire etc.
  • Aviva Canada’s claims data is collected from 2016 to year-to-date March 2018.
  • A PDF copy of the opinion poll results from Fall 2017 is available.

About Aviva Canada

Aviva Canada is one of the leading property and casualty insurance groups in the country, providing home, automobile, leisure/lifestyle and business insurance to 2.8 million customers. A subsidiary of UK-based Aviva plc, Aviva Canada has more than 4,000 employees focused on creating a bright and sustainable future for our customers and our communities.

Aviva Canada invests in positive change through the Aviva Community Fund, Canada’s longest running online community funding competition. Since its inception in 2009, the Aviva Community Fund has awarded $8.5 million to over 280 charities and community groups nationwide. Aviva Canada, bringing over 300 years of good thinking and insurance solutions to Canadians from coast-to-coast.

For more information, visit aviva.ca or Aviva Canada’s blogTwitterFacebook and LinkedIn pages.

SOURCE Aviva Canada Inc.

What climate change means for home insurance

Excerpted article was written  By 

When Leanne Johnston considered home insurance options for her brand new home some six years ago, a $5,000 deductible seemed to make a lot of sense on $2 million worth of coverage.

Coming up with that kind of cash wouldn’t have been an issue at the time, Johnston, who works at a benefits consulting firm, told Global News. And her parents’ advice echoed in her head: “Never ever make a claim” — unless you absolutely have to.

Johnston reckoned she might never need to use her insurance, anyways.

But that all changed on May 4, when a freak windstorm ripped through the Greater Toronto area including Johnston’s backyard near the Scarborough Bluffs, at the eastern end of the city.

Johnston and her husband came home to find that the wind had uprooted four out of their five large, healthy trees. In falling, they had smashed a 100-foot fence as well as the family’s shed and a large Costco playground.

With two kids in daycare, $5,000 suddenly seemed like a lot of money to pay to get the insurance to kick in.

“This is a huge shock to us,” Johnston told Global News

Expect to make more frequent claims

Many Canadians may soon experience what Johnston is going through, experts told Global News.

With extreme weather becoming more and more common, the probability of having to make several, relatively lower-value insurance claims is going up, according to Blair Feltmate, head of the Intact Centre on Climate Adaptation at the University of Waterloo. And so is the risk of living through a life-wrecking event, of the kind that makes $100,000 worth of damage to your basement, he added.

“The weather and experiences of the past are [no longer] a predictor of the weather and experiences of the future,” Feltmate told Global News.

Homeowners should opt for policies with lower deductibles and higher coverage limits, he said. The math will likely work in your favour even knowing that your premiums rise after making a claim, he added.

That, though, may be pricey. Insurance premiums, in general, are going up because the frequency of claims is increasing, said Anne Marie Thomas of InsuranceHotline.com, an insurance comparisons site.

And when it comes to water damage, there is often a separate deductible and coverage cap, she noted. That’s because coverage for things like overland flooding (when water seeps through doors and windows) and sewer backup (when sewage spills over due to clogged pipes) require separate, add-on policies.

The frequency of damages from wind, fire and ice has gone up — flooding is the No. 1 most expensive source of home insurance claims, according to Feltmate.

“Water is the new fire,” he said.

Every spring, it seems, rivers from New Brunswick to British Columbia are overflowing and leaving a path of destruction behind them. And even Canadians who live nowhere close to a body of water are coping with freakish downpours that often overwhelm old city pipes, causing damages that can easily reach in the tens of thousands of dollars.

A flooded basement costs an average of $43,000 in major cities, Feltmate said.

Expensive, spotty and fickle coverage

Canada is catching up when it comes to flood insurance. The country got a wake-up call in June 2013, when heavy rainfall in Calgary turned into the worst flooding in Alberta’s history.

Since then, overland flood insurance has become available and sewer-backup coverage is now more widely available.

Still, the price of peace of mind, when it comes to water damage, is steep.

While deductibles on plain-vanilla home insurance policies usually go from $500 to $1,000, it’s common to see deductibles in the $5,000-$10,000 for sewer backup coverage, Thomas said.

Premiums have gone up, too. She remembers paying an additional $50 per year for sewer backup insurance for coverage up to the limit of $200,000 on her main policy. Today, the same kind of water damage coverage on that house costs $350 a year and the limit is $40,000.

Even if you’re ready to fork out the money, though, you might not be able to get the coverage you need.

“From Halifax to Victoria, we’re seeing growth in the uninsurability of homes,” Feltmate said. “People who can’t get insurance because the frequency of flooding is too high.”

This has led Feltmate to expect a spike in mortgage defaults in areas that suffer through multiple floods, wildfires, ice storms or other types of cataclysm.

A homeowner may be able to foot the bill for a flooded basement once, he reckons, but probably not two or three times.

A wave of mortgage defaults, especially in flood-prone areas, “is the next show to drop in Canada,” he told Global News.

But even those who initially get coverage become uninsurable. Insurance providers have become skittish about water damage claims, in particular. Making a claim for something like sewer backup might result in your insurance denying you further coverage, Thomas said. And finding another provider willing to offer you a policy can be tricky, she added.

Unlike car insurance, home insurance in Canada is lightly regulated, meaning that insurers have ample latitude to charge whatever they like and offer coverage as they see fit, Thomas said.

As for Johnston, she and her husband decided not to use their insurance. They plan to cut up the tree and clean up their backyard themselves and will rebuild the fence with help from the neighbours, who have also pitched in for half of the cost of the raw material. With that, the Johnstons’ overall cost should come in right around $5,000.

“We’re pretty easy going, we take life as it comes,” she said.

However, she added, “For the last tree that remains — it does make me nervous that my children are now playing in the backyard.”

Source: Global News

Federal insurance oversight bodies seeking input on customer service regulations

By Ian Burns | LexisNexis Canada

Two oversight bodies for Canada’s insurance regulators are currently seeking input on new recommendations to ensure fair treatment of customers, and legal experts are saying it reflects a move to get regulations more consistent across the provinces as well as in line with international standards.

The Canadian Council of Insurance Regulators (CCIR) and the Canadian Insurance Services Regulatory Organizations (CISRO) released a draft joint guidance May 3 for public consultation that sets out their overarching expectations for how insurers and intermediaries conduct insurance business and ensure the fair treatment of customers.

“Fair treatment of customers has become the key focus of financial services regulatory authorities in Canada and abroad and this proposed guidance will be its cornerstone in the insurance sector,” said CCIR chair Patrick Déry. “It aims at fostering meaningful discussions between regulators, insurers and intermediaries on market conduct.”

Although each province and territory in Canada has its own set of regulatory standards for insurers, the CCIR and CISRO note that each have a common set of expectations pertaining to the conduct of business to ensure the fair treatment of customers.

The guidance is looking into issues of disclosure on contracts, with the two organizations saying customers be given “appropriate information in order to make an informed decision before entering into a contract.” CCIR and CISRO say disclosure to customers should be “up to date and provided in a way that is clear, fair and not misleading, using plain language wherever possible,” and all advice given by insurers be explained and documented, particularly in the case of complex products.

CCIR and CISRO say they also expect that policyholders are provided information that allows them to make informed decisions throughout the lifetime of their contracts, ensuring that when changes are made to policies the customer’s rights and obligations are known and that consent to changes is obtained. All claims should be “examined diligently and fairly settled,” with written documentation maintained throughout, and that ensuring dispute resolution procedures follow a “balanced and impartial approach.”

Nicole Mangan of Richards Buell Sutton LLP said the guidance seems to be “very aware of how everyone can work better to ensure that all aspects of consumer rights from beginning to end are the focus of both insurers and their agents.”

“What I think they’re striving to do is ensure that there are consistent standards both nationally and internationally, and I think their goal is related to customer expectations because your customers don’t vary their expectations province to province just because the provincial regulations vary province to province,” she said. “I think they’re really trying the best they can to put into place a national standard and expectation, and they’ve really tried to think about the product and the life cycle in insurance from beginning to end.”

Mangan noted CCIR and CISRO are not only speaking about responsibility towards customers of those involved in the insurance field but also the different legal implications that come into play.

“I think they’re being careful to try and put out guidelines that are general enough that they aren’t stepping on any provincial authority and would be something that it would be practical to put in consistently at a national level,” she said. “But at the same time they’re talking about the professional responsibility obligation of people in the profession such as brokers, the ethical obligations associated with the industry, they’re talking about privacy law obligations. So you really start to see it’s not just about the simple regulation of insurance, but also kind of a kind of complex set of legal responsibilities they’re trying to tie together with one set of standards.”

Heather Vaughan of Benson Percival Brown LLP said she believed the purpose of the CCIR and CISRO’s actions is to bring some insurance regulations under a common set of standards, both nationally and internationally.

“So they’ve sort of looked to the international standards to see how they can bring those in Canada. The IMF and other organizations are always looking to see what’s going on in member countries,” she said. “They just want to make sure that we’re following the best practices in the insurance sector and are compatible with what people are doing internationally.”

Vaughan also said the guidance is attempting to address technological advances in the industry as well.

“Insurance is going through the same sort of disruption that everyone else is undergoing,” she said. “How can we get our clients the services they want and how can we sell to our clients the way they want to be sold to?”

Mangan said the CCIR has a 2017-2020 strategic plan which includes prioritizing co-operative supervision and enhanced consumer protection, leading to more collaboration within the industry.

“You can see [the guidance] is designed to target the industry as a whole. They talk about agents and brokers, they talk about companies, they talk about third party administrators,” she said. “So you can see what they are trying to do is basically take the approach that if everyone has all the same obligations throughout the industry, it will kind of bring that consistency and cohesiveness to the products being offered.”

The public consultation period is open until June 18, 2018. The proposed guidance can be found on the CCIR and CISRO websites. A joint CCIR-CISRO working group will review public feedback over the summer, and expects to release the finalized guidance in the fall of 2018.

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