Flood insurance difficult to obtain for homeowners at repeated risk

By Jonathan Forani, CTVNews.ca

More Canadians have flood insurance than ever, but homeowners at repeated risk still face the most difficulty obtaining coverage, according to lobbyists.

Insurance for “overland flooding,” from rising water levels rather than sewer backups or roof seepage, has only been offered by insurers across the country since 2015. Now, about a third of Canadians have it, according to Craig Stewart of the Insurance Bureau of Canada.

But homeowners in high-risk flood zones who may require repeated claims have limited options.

“Presently there really is not affordable high-risk insurance available for those that are going to be at repeated risk of flooding,” said Stewart in an interview with CTV’s Your Morning. Stewart, who leads a task force of insurers, realtors and local governments, presented recommendations to ministers earlier this year on how to protect high-risk homeowners.

“For those that are at repeated risk, we are recommending to governments that they take a hard look at strategic retreat, getting those people out of harm’s way,” he said.

Any official final solution based off the task force recommendations is likely a year away, he added. Until then, homeowners facing repeated risk of flooding have few options, as their needs would have to be subsidized by taxpayers or other policy holders, he said.

Some homeowners in that group have taken “drastic” measures to avoid risk, he said, such as putting their homes on stilts. Stewart recommends it.

“Or you just absolutely reduce your risk by either moving or just making sure you’re taking everything out of your low lying area or your basement that’s going to reduce any future claim,” he said.

According to a 2017 report by the Munk School of Global Affairs, flood-related losses have surpassed fire and theft as the primary source of property insurance claims. Despite increasing claims, a lot of Canadians aren’t even aware they live in a floodplain until they get flooded, said Stewart.

“Canadians first and foremost should understand what their risk level is,” he said.

Most flood victims will need to rely on gov’t compensation

CTV Montreal

Most flood victims will have to rely on the government for compensation and not their insurance companies, according to the Insurance Bureau of Canada.

Only 30% of Quebecers have the kind of flood insurance introduced in Quebec in 2017 that will qualify them for compensation – many didn’t qualify, didn’t think they’d need it, or decided the premiums were too hefty.

“If they were flooded and they don’t have the flood endorsement in their home policy then their option is to file a claim with the government for financial assistance,” said Pierre Babinsky of the Insurance Bureau of Canada.

Flood victim Mark Zousmin has the insurance, and is dealing with his second flood in three years.

“Before the flood of 2017, I paid approximately $700 – 800 per year and after, they increased it to almost $1,500. I like this area but if they consider it in a flood zone and everybody is supposed to move, I will have no choice,” he said.

The provincial government said it’s working to improve the compensation process, announcing Wednesday a minister’s ‘action group,’ so flood victims get money faster and look toward the future.

“What’s been simplified is that people can know faster how much money they are entitled to receive and they can get this money faster,” said Public Security Minister Genevieve Guilbault.

Those going through it now say so far, it’s the same story as two years ago.

“The insurance companies say call the city, the city says call the government,” said flood victim Serge Lafleur. “In the end, it’s us that have to pay.”

The Insurance Bureau of Canada said it’s working with the federal government to create a funding program to help flood victims.

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

Postal code change leaves couple facing insurance hike

Ryan Flanagan, Producer, CTVNews.ca

An Ontario couple saw their home and auto insurance premiums increase to the tune of hundreds of dollars per year because of a change in their address – even though they didn’t move.

Christine and David Pindar live in a rural part of Oshawa, Ont., east of Toronto.

They were notified by Canada Post last summer that the last three digits of their postal code would be changing. Once the change took effect, they passed on the new information to their insurance company, the Allstate Insurance Company of Canada.

“They said ‘Oh, well that means your premiums are going to have to go up,’” Christine Pindar told CTVNews.ca.

Pindar said her house insurance premium rose by 37 per cent and the premiums for her and her husband’s three cars increased by about 10 per cent each. She pegged the overall increase at approximately $600 per year.

Taking a deeper dive into the numbers, she found that her insurance company now believed it would cost her more to replace her house in the event it was destroyed – not just because of inflation, but also because of the new postal code – while the actual assessed value of the home remained the same.

When she contacted Allstate, she said she was told that the new postal code put her into a higher-risk area.

Particularly strange, as Pindar sees it, is that the new postal code didn’t exist before last summer – making her wonder how exactly it can be deemed risky.

“It’s a brand-new postal code. How can that create an increase? It just blows my mind,” she said.

Pindar said she and her husband are looking into their options and if there is anything they can do to lower their premiums.

“For anybody, $600 is a slap in the face for no reason,” she said.

A spokesperson for Allstate Canada declined to address the Pindars’ situation specifically.


According to Canada Post, the Pindars’ home is one of approximately 500 in the Oshawa area which saw their postal codes reassigned as part of changes to postal routes. The changes “are necessary to accommodate increased growth in the area and to improve overall delivery efficiencies,” according to a spokesperson for the agency.

“Postal code changes do not happen often and we go to great lengths not to change them,” the spokesperson said.

Postal codes play a significant role in determining insurance premiums in Ontario. The Allstate spokesperson said the company includes postal code data as well as a home’s age and type when calculating home insurance policies. Auto insurance policies are based on factors including the vehicle’s safety rating and usage, as well as the driver’s experience and previous claims.

“All insurance companies operating in Ontario are mandated by the provincial regulator to consider postal codes when calculating premiums and we must adhere to that regulatory framework,” Jordan Kerbel, the company’s director of external relations, said in a statement.

According to the Financial Services Commission of Ontario, people living in urban areas generally face higher rates because of higher traffic levels and increased likelihood of theft.

Pindar suspects this may be at play in her case, as her previous postal code covered an area spread further out from Highway 407 than the area of the new code.

Jasmine Daya, a Toronto-based lawyer, told CTV’s Your Morning Monday that Ontario’s so-called postal code discrimination tends to benefit drivers in downtown Toronto and outside the Greater Toronto Area, while drivers in suburban parts of the GTA typically have to pay higher auto insurance rates.

“People in Brampton, people in Scarborough, their rates are very high,” she said.

“People who are paying lower rates, being outside the GTA, are very happy to have postal code discrimination because they benefit.”

Two bills introduced at Queen’s Park last fall called for the Ontario government to ban the practiceof letting insurance companies set rates based on addresses or postal codes.

The insurance question: No heat or hot water for 6 days at North York condo building

CBC News Toronto

A North York condo building went six days without hot water or heat after a fire in the building’s hydro transformer over the weekend.

Hoseyn Khosravani, a tenant at 399 Spring Garden Ave., told CBC Toronto he had been layering blankets on his bed and heating up water on his stove in order to wash.

“It’s pretty bad,” he said in an interview a few hours before heat and hot water were restored late Thursday afternoon.

Khosravani’s neighbour, Reza Maleki, had also been struggling, describing the six days without heat or hot water as “hard.”

In a written statement to CBC Toronto, the building management company, Times Property Management Inc., said was “working around the clock,” along with Toronto Hydro and various contractors, to fix the problems.

Toronto Fire confirms that they were called to this North York address on Saturday, April 20 to deal with reports of smoke in the hydro vault near the building’s condo garage. (Garry Asselstine/CBC)

Two hours later, they followed up with tenants, writing that hot water, heat, and hallway ventilation had been restored to the building, though some communal rooms still lacked power.

The insurance question

Though heat and hot water have returned, Khosravani remains frustrated by the slow pace of repairs and lack of clear communication from condo management.

When he had asked about building insurance and options to be housed elsewhere, he said he was eventually told by the management team to find the certificate number for the insurance policy on his own unit.

Denise Lash, a lawyer who specializes in condo law, says that’s by the book.

Lash says condo corporations are obligated to take “reasonable steps” to repair damage to common elements like heat and electricity — but that repair processes can be complicated and lengthy, and that condo corps don’t need to pay for tenants to live elsewhere.

“That is something that a corporation does not have an obligation to do … That is where it’s important for unit owners to get their proper insurance,” she said.

Lash also said the situation can be quite different for tenants like Khosravani who are renting, as opposed to unit owners.

“An owner should get their own insurance. A landlord may have an obligation with respect to finding accommodation for their tenant,” she said.

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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