Sufficient insurance key to recovery in the event of environmental disasters

The Canadian Press

The Fort McMurray wildfire in May 2016 destroyed almost 2,600 homes and resulted in many tales of hardship but Rob de Pruis says one man’s “heart-breaking” story stands out for him.

The director of consumer and industry relations, western, for the Insurance Bureau of Canada, was stationed in the northern Alberta community for a year after the fire forced the temporary evacuation of more than 80,000 people.

At an event to help people with their insurance claims, a man who was nearing retirement age asked for advice, explaining his single-family home had burned to the ground.

“He said, ‘Well, I just paid off my mortgage, my mortgage company did not require me to have property insurance anymore, so I cancelled my property insurance, thinking that was the right thing to do,”’ de Pruis recalled.

The man was left with clear title to a residential lot full of charred debris. With no insurance, there was nothing the bureau could do.

“I heard a couple of years later that he sold the land and moved away to a community that was less costly for him,” said de Pruis. “It was just a bad memory.”

This spring’s wildfires in northern Alberta, floods in Quebec, Ontario and New Brunswick and fears of a third year of unusually intense forest fires in B.C. serve as a reminder that disaster can strike at any time and in unexpected ways.

The highest insured property loss in a year was $5.0 billion in 2016, with $3.7 billion of that the result of the Fort McMurray wildfire which resulted in about 60,000 claims, the Insurance Bureau says.

In the year 2013, the second-highest losses of $3.2 billion were recorded, including $1.6 billion as a result of floods in southern Alberta that destroyed parts of downtown Calgary, and about $1 billion as a result of a summer storm and flooding in Toronto. A big winter storm that hit southern Ontario and parts of Eastern Canada also padded the total.

“People realize too late what their insurance policy covers,” said de Pruis.

“When they lose everything, they realize the limit they chose to cover their stuff may not be enough to purchase all of their stuff again.”

Her level of insurance was the last thing on her mind as Jen Skinner, 37, and her husband and toddler son ran to their vehicle to escape the approaching Fort McMurray wildfire three years ago.

“The pieces of ash falling down were unreal, the size of my hand, and I ran in the house and told my husband, ‘Get garbage bags, throw clothes in the bags and we’re going,”’ she said.

“We left so fast we had to pull over on the side of the highway to determine where we were going to go.”

She said she was surprised the house was still standing when they returned but the siding was melted in places and the interior contaminated by smoke and toxins.

They wound up spending six months away from home and replacing almost every piece of furniture and every child’s toy. Their insurance claim still hasn’t been finalized but is expected to come in at more than $200,000.

As a mortgage broker, Skinner knew a lot about insuring property but her experience as a claimant taught her some new lessons.

“One thing I’d recommend is make sure you have everything in email, do not take anything verbal over the phone,” she said, adding she dealt with six different insurance company claims adjusters.

“I had one adjuster tell me to throw away all of my kid’s toys, anything that was plastic that might have absorbed the toxins, so I did that. And then the next adjuster said, ‘No, we’re going to clean this.”’

The Skinners had enough insurance to cover their expenses while their home was cleaned and repaired but she says many of her friends and neighbours ran out and had to pay their own way.

Another tip is to regularly take pictures or videos of the contents of the house because the insurance company will want a list of everything that needs to be replaced, she said.

Not all policyholders realize the difference between replacement cost and cash value insurance policies, de Pruis said. While choosing the latter will likely result in lower premiums, it could leave you short when replacing your property.

Most residential insurance policies provide coverage for fire damage, expenses in the event of a mandatory evacuation and compensation if a power outage damages appliances or their contents, he added.

Extra insurance should be considered for overland flooding — now available almost everywhere in Canada after being difficult to find five years ago — and sewer backup, along with special insurance for items such as jewelry, stamp or art collections.

Most Canadians have heard of the Fort McMurray wildfire but don’t know about a flash flood a few months later that overwhelmed the sewer system and damaged homes in higher-elevation neighbourhoods, de Pruis said.

“Even if you don’t live beside a lake or a river, you still could be subject to flooding,” he warned.

Wildfire Situation in Alberta: IBC is here to help – safety is top priority

As wildfires force a number of Albertans to evacuate their homes, Insurance Bureau of Canada (IBC) is reaching out with information and advice.

“Our thoughts are with those whose lives have been disrupted by the wildfires. The top priority right now is the safety of those affected,” said Celyeste Power, Vice-President, Western, IBC. “The insurance industry is here to help. Anyone with questions about their home, car or business insurance can call their insurance representative or IBC’s Consumer Information Centre at 1-844-2ask-IBC (1-844-227-5422) or email askibcwest@ibc.ca.”

What insurance covers

Almost all home and business insurance policies cover fire damage. If residents have to leave their homes because of a mandatory evacuation order issued by civil authorities, most homeowner’s and tenant’s insurance policies will provide coverage for reasonable additional living expenses for a specified period of time. Your insurance representative is at the ready to clarify the details of your policy.

The claims process

If you have been affected by the wildfires, when safe to do so:

  • List all damaged or destroyed items. Taking photos can be helpful.
  • Call your insurance representative and/or company.
  • If possible, assemble proofs of purchase, photos, receipts and warranties. Keep damaged items unless they pose a health hazard.
  • Keep all of the receipts related to cleanup.

If you have been displaced by the wildfires:

  • Ask your insurance representative what living expenses you’re entitled to and for what length of time.
  • Keep the receipts for your living expenses.

Next steps

  • Once you have reported a loss to your insurance representative, you will be assigned a claims adjuster. It may take some time, given the number of people affected by the wildfires, but the adjuster will contact you.
  • The claims adjuster will investigate the circumstances of your loss, examine the documents you provide and explain the process. Take notes during the conversations and ask questions if you need clarification.
  • Your insurance company will ask you to complete a Proof of Loss form, to list the property and/or items that have been damaged or destroyed, with the corresponding value or cost of the damage or loss. You must sign and swear that the statements you make in the Proof of Loss form are true. Ask your insurance representative or claims adjuster to clarify anything you are unsure about.

To learn more about wildfires and wildfire safety, visit IBC’s website.

About Insurance Bureau of Canada
Insurance Bureau of Canada (IBC) is the national industry association representing Canada’s private home, auto and business insurers. Its member companies make up 90% of the property and casualty (P&C) insurance market in Canada. For more than 50 years, IBC has worked with governments across the country to help make affordable home, auto and business insurance available for all Canadians. IBC supports the vision of consumers and governments trusting, valuing and supporting the private P&C insurance industry. It champions key issues and helps educate consumers on how best to protect their homes, cars, businesses and properties.

P&C insurance touches the lives of nearly every Canadian and plays a critical role in keeping businesses safe and the Canadian economy strong. It employs more than 126,000 Canadians, pays $9 billion in taxes and has a total premium base of $54.7 billion.

For media releases and more information, visit IBC’s Media Centre at www.ibc.ca. Follow us on Twitter @IBC_West or like us on Facebook. If you have a question about home, auto or business insurance, contact IBC’s Consumer Information Centre at 1-844-2ask-IBC.

If you require more information, IBC spokespeople are available to discuss the details in this media release.

SOURCE Insurance Bureau of Canada

Future floods: Climate change’s role in reshaping natural disasters

Warming planet increases the likelihood of flooding in the future, says federal government

CBC News

As water levels rose along the St. John River this spring, many New Brunswickers had two reactions.

First, they prepared urgently for the flood.

Then they asked themselves whether this was evidence of climate change — whether two major floods in two years proves that human activity has altered the forces of nature.

“Things have certainly changed,” Elaine Price of Mill Cove said as she watched the water rise toward her home last month.

In Chipman, Rhonda Saulnier was asking the same question.

“It’s unbelievable,” she said.

“So now that it’s happened two years in a row, like everybody I’m afraid it’s the new norm. I’m praying it’s not.”

Water levels peaked in Fredericton on April 23 at 8.36 metres, compared with a peak of 8.31 metres last year. In Saint John, the peak was 5.53 metres compared with 5.76 metres last year.

For the second straight year, homes were evacuated. For the second straight year, the Trans-Canada Highway was closed downriver from Fredericton.

Even officials who oversee flood response seemed taken aback.

“When this event happened last year, we were under the impression this was a historical event, and two years in a row, the historical event happened,” said Ahmed Dassouki, the director of operations at the Department of Transportation and Infrastructure.

“It’s a new day, and two years in a row is telling us we can’t just do the same thing,” Premier Blaine Higgs told reporters.

Yes, this is climate change — probably

Is this climate change?

The answer isn’t straightforward, but the consensus is: yes, probably, likely.

“You can’t attribute one event to climate change,” said Barrie Bonsal, a senior research scientist with Environment Canada, who co-authored a major report on climate change released last month.

“But as we warm the atmosphere, and we see associated impacts, we are increasing the probability of certain types of events that are associated with warming.”

READ MORE HERE: 

 

No respite from flood threat for thousands in 3 provinces

More Canadian soldiers are helping in the battle to sandbag homes against the still-rising floodwaters in central and eastern Canada than are deployed overseas, Defence Minister Harjit Sajjan says, though in a few places the water is slowly beginning to recede.

States of emergency have been declared in Quebec, Ontario, and New Brunswick as waters reach or surpass historic flood levels reached, in some cases, just two years ago.

Thousands of people have been forced from their homes, including 9,500 in Quebec – two-thirds of them in Ste-Marthe-sur-le-Lac, west of Montreal, after fleeing water from the Lake of Two Mountains that burst through a natural dike Saturday – and more are being urged to leave before water cuts them off from help.

The military has helped build one new dike in Ste-Marthe-sur-le-Lac and is almost finished a second, said Quebec Public Security Minister Genevieve Guilbault, though she had no answer about why the dike in the bedroom community failed.

The mammoth military response now stands at 2,000 soldiers in flood-ravaged regions that have requested help, compared to about 1,600 deployed overseas. Sajjan said Monday that more could be sent if cities that have declared states of emergency ask for additional troops.

“We don’t have any limit. It’s all based on the situation. If more are needed, we will always make more troops available,” Sajjan told reporters near Saint John, N.B.

The military’s orders have been to protect property, but Quebec Premier Francois Legault said Monday afternoon that he wants the troops to stay in the province once the waters subside to help remove the sandbags, which have to be carefully disposed of after being exposed to potentially contaminated water.

“Someone needs to remove them and clean up,” Legault told reporters on a visit to the flood zone in Maskinonge, about 100 kilometres northeast of Montreal. “It’s not exactly in the job description of the army, but we are trying to insist to have the army there for clean-up operations and we are waiting for an answer from Ottawa.”

A change in orders would require negotiations among the municipal, provincial and federal governments. Municipal officials in Ottawa didn’t expect to be near clean-up mode until the Victoria Day long weekend, and planning for cleanup hasn’t yet included talk about asking the military for more help.

“We’re looking at this day-to-day,” said Col. Jason Adair, whose brigade is spread from the east to west edges of the national capital. “Our mandate is crystal clear and that is to provide sandbagging, or sandbags at the right place and the right time … and anything beyond that, we’re just not there right now.”

An estimated million sandbags are standing between the bloated Ottawa River and residences and businesses in the capital. More are in place in Gatineau, Que., on the river’s opposite bank. Even so, whole riverfront neighbourhoods are flooded.

The Ottawa River isn’t expected to peak until mid-week, after rising by another 50 cm. What happens after that, as in other regions, depends on the weather. Forecasts call for between 35 and 50 mm of rain toward the end of the week and depending on where it falls – the Ottawa River drains about 140,000 square kilometres of eastern Ontario and western Quebec – and how long the river takes to recede, there could be a second flood peak.

Ontario’s cottage country is also bracing for rain after flooding prompted states of emergency in Bracebridge, Muskoka Lakes, Huntsville and Minden Hills.

In New Brunswick, floodwaters along the Saint John River slowly receded Monday, though more than 80 roads cross the province remain underwater and closed, including a major section of the Trans-Canada Highway.

Provincial officials urged patience from affected communities, warning it will take time before recovery and cleanup begin.

Quebec’s short-term weather forecast has no serious rain expected across the province until Wednesday. But many parts of Quebec are likewise expected to remain flooded for some time.

The record flooding is expected to push losses for homeowners from extreme weather to more than $1 billion this year – in all of 2018 the figure was close to $2 billion – which has led governments to look at “alternative solutions in order to shield the taxpayer from the continued bailouts,” said Craig Stewart, vice-president of federal affairs with the Insurance Bureau of Canada.

Federal, provincial and territorial emergency-management ministers appear to be most interested in a British model that would see the people living in high-risk flood areas moved out of harm’s way and a public insurance program for the remainder of homes.

Quebec is offering $200,000 to people with deep damage to their homes to move out of flood zones, an idea that the federal Liberals say they’ll also consider, along with spending on infrastructure to mitigate the effects of floods and extreme weather from climate change.

Premier Legault reiterated his call for people to “seriously consider” the offer.

– With files from Giuseppe Valiante in Montreal and Kevin Bissett in Saint John

How does Canada mitigate the impact of flooding?

The director of the MacEachen Institute for Public Policy and Governance at Dalhousie University says provinces need to do more to mitigate the impact of flooding, by forcing residents to make tough decisions.

“We need to take a medium-term view, work with the communities and get people out of flood-prone areas,” says Dr. Kevin Quigley.

But how can provinces encourage people to get out of certain areas that are becoming more and more accustomed to devastating flooding?

New Brunswick is one of the provinces dealing with a massive deluge of water. Premier Blaine Higgs told a press conference Tuesday that there needs to be a deeper look into the issue.

“We’ve got to look seriously at the impacts that we’re seeing with changing weather conditions and how we evaluate building sites, and how we encourage people to actually relocate.”

François Legault, Quebec’s premier, announced an accumulative compensation plan capped at $100,000 for residents in that province, and then a form of buyout plan.

“It means if people ask for some money in the next three, five, ten years, there will be an accumulative amount of $100,000,” Legault told reporters Tuesday. “When the accumulative amount will be reached, then we’ll offer a maximum of $200,000 to move to another house.”

Quigley says a buyout incentive is a good idea, but it needs a lot of thought and community consultation.

“You could buy a lot of properties that are going to sit empty and going to be vulnerabilities and environmental problems and health and safety problems in other ways for the government, they own a bunch of properties,” he said.

Quigley added that better urban planning is needed along with “building robust infrastructure.”

While acknowledging many people have long-enjoyed living on the water, the risks are increasing with the impact of climate change, according to Quigley.

Last year the New Brunswick Liberal Party required some property owners to prove they took steps to help mitigate flood risks from impacting their homes.

Higgs said the idea of permits should be looked at, but nothing is finalized.

“We have to work with that with individuals because they’re going to have trouble getting insurance,” he said. “We have to plan a different profile going forward.”

Quigley says more and more data is becoming available about flooding impacts, meaning insurance policies can be better implemented but need to be regulated by the government.

“If we know it’s predictable enough, then we can ask people to pay for the real cost of the property that they’re occupying,” he says.

New standard recommended in response to high-wind damage to Canadian homes

A report from the Institute for Catastrophic Loss Reduction (ICLR) and the Standards Council of Canada (SCC) recommends the development of a new national standard of Canada on wind resilience to mitigate residential and small building property damage resulting from natural disasters in Canada.

High winds contributed in part to most natural catastrophes recorded by the Insurance Bureau of Canada between 1983 and 2016. The May 2018 windstorm, for example, in southern Ontario and Quebec, followed by tornadoes in the National Capital Region in September 2018, caused close to $1 billion in insured losses, according to Catastrophe Indices and Quantifications Inc.

Specifically, the report proposes measures for four major categories: roofs; walls and upper and lower storey connections; anchoring of the building to the foundation; and additional construction details such as garage doors. These measures could form the basis of a new National Standard of Canada, which governments could incorporate into regulation, which could be integrated in the National Building Code or to which builders could adhere voluntarily thus raising the bar for construction in Canada.

“Protecting residential structures will be aided by measures that have the biggest impact on structural safety,” said Paul Kovacs, executive director of the Institute for Catastrophic Loss Reduction.  “For example, roofs are particularly vulnerable to the impacts of high wind. Keeping roofs sound and well-connected to walls helps reduce structural failure and property damage, like that associated with intrusion of water.”

“Standardization is an important tool to protect Canadian communities from extreme weather,” said Chantal Guay, CEO of the Standards Council of Canada. “New guidance in this area is a much-needed enhancement to the infrastructure and building safety toolbox,” said Guay. “By collaborating with ICLR and SCC accredited standards development organizations, we are setting a foundation for a new national standard that will help protect Canadians and their homes during extreme weather events.”

Homeowners, builders, insurers and decision makers are well-advised to mitigate the risks of extreme weather events to property. The report is available for download on ICLR’s website – www.iclr.org – and on SCC’s website – www.scc.ca.

About the Institute for Catastrophic Loss Reduction

Established in 1997 by Canada’s property and casualty insurers, the Institute for Catastrophic Loss Reduction is an independent, not-for-profit research institute based in Toronto and at Western University in London, Canada. The International Council for Science designated the Institute as an International Centre of Excellence in integrated research on disaster risk. The Institute is also a founding member of the Global Alliance of Disaster Research Institutes. The Institute’s research staff are internationally recognized for pioneering work in a number of fields including wind and seismic engineering, atmospheric sciences, water resources engineering and economics. Multi-disciplined research is a foundation for the Institute’s work to build communities more resilient to disasters.

About the Standards Council of Canada

SCC is a Crown corporation that leads Canada’s standardization network. SCC facilitates the development and use of national and international standards and accreditation services in order to enhance Canada’s competitiveness and well-being. SCC is part of the Innovation, Science and Economic Development Canada portfolio. To learn more about SCC, please visit www.scc.ca.

For the latest SCC news, subscribe to the SCC Monthly Newsletter or follow us on TwitterFacebook, or LinkedIn.

SOURCE Institute for Catastrophic Loss Reduction

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