‘Take lots of photos, don’t take a denial at face value, make notes’
The excerpted article was written by CBC News
As Northern Alberta residents discover the extent of flooding damage to their homes and businesses, a Fort McMurray lawyer offers a few practical tips that could pay off later in dealings with insurance companies.
Take photos. Make lists. Understand your policy. And don’t give up if your claim is initially denied.
“They’ve just been back to the property for the last day or two and the news is pretty heartbreaking,” said Christine Burton, a Fort McMurray lawyer who has worked through insurance issues with numerous residents in recent years.
“People are dealing with the shock and impact of cleaning up,” Burton told CBC Radio’s Edmonton AM on Tuesday. “We’re telling people, ‘Please, take lots of photos, don’t take a denial at face value, make notes. Stay safe.'”
More than 14,000 people were evacuated as a result of recent river flooding in and around Fort McMurray, as well as along the Peace River.
As people progress from clean-up to rebuild, it is critical that they understand their insurance policies, even if it means hiring a lawyer to work through “subtle” policy language, said Burton.
Most policies won’t include coverage for overland flooding, when water flows over dry land before entering a property through doors or windows.
“It’s often a special endorsement you can buy. It’s very often expensive,” Burton said. The cost depends on the flood risk in the area where you live.
However, property owners whose policy includes a special endorsement for sewer backup may be able to get some money from their insurance companies.
“Take photos of your basements, the drains, the sump pump. Make notes of everything that’s happening, make lists of everything that you’ve lost.
“Fort McMurray has become a little bit of an expert, unfortunately, at insurance claims through fire — and we’re still dealing with some of those claims,” Burton said. “Don’t take a denial at face value. You can challenge this. Understand your policy.”
Don Scott, mayor of the Regional Municipality of Wood Buffalo, has said he expects residential damages from the flooding in Fort McMurray could top $100 million.
In a statement, the Insurance Bureau of Canada said overland and sewer backup coverage are the key parts of a policy that pertain to flooding events but both of these are optional and must be added to home insurance policies.
Properties in high-flood areas may not be offered the coverage, the statement said.
“If a home has flood damage from this event but did not purchase the optional overland flood insurance or it was not available as the area is high-risk for flood, the policy would not cover the damages,” Celyeste Power, vice-president for the insurance bureau’s western region, said in the statement.
Property owners not covered by insurance may be able to access provincial disaster relief funding. Alberta Premier Jason Kenney has said the provincial disaster relief program will likely be triggered for Wood Buffalo flooding.
Under that program, the government would provide some financial support for recovery costs for critical public infrastructure and non-insured private infrastructure.
Between 2009 and 2019, insurers paid out an average $1.9 billion per year on catastrophic flooding claims, compared with an average $422 million annually in the period from 1983 until 2008, according to Insurance Bureau data.
More than $2 billion in insured losses resulted from the June 2013 flooding event in southern Alberta, which caused $6 billion in damages and displaced 100,000 people.
NEW YORK, May 4, 2020 /PRNewswire/ — Insurance in Canada: Coronavirus (COVID-19) Sector Impact
Read the full report: https://www.reportlinker.com/p05890931/?utm_source=PRN
‘Insurance in Canada: Coronavirus (COVID-19) Sector Impact’ report provides brief review of the key trends and evolving developments that shape the impact of the COVID-19 outbreak in the Canadian insurance industry.
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The excerpted article was written by Meera Jain, Raman Johal and Samantha Ip
Clark Wilson LLP
The COVID-19 global pandemic poses an unprecedented risk to public health and safety and has already had a tremendous impact on our economy, forcing businesses to close, projects to shut down, and creating new liability exposures. Consequently, businesses and insurers have many questions regarding policy wording and insurance coverage relating to COVID-19. Will a commercial policy respond to cover business interruption losses? Will a builders’ risk policy respond to inevitable losses from project closure and delay? Will an employment practices liability policy cover potential lawsuits commenced by an employee alleging negligence for exposing the employee to COVID-19? Will a directors and officers policy respond to potential claims against senior management by shareholders or investors arising from corporate decisions made in response to COVID-19?
To answer these questions, the Clark Wilson Insurance Group is presenting a series of articles through its COVID-19 INSURANCE SERIES. In this article, we address whether the “unoccupied exclusion” contained in most homeowner insurance policies will be triggered if a homeowner is caught somewhere due to travel restrictions or other circumstances and his or her home ends up being unoccupied for more than thirty days.
Will the Vacancy Exclusion Operate to Exclude Coverage in the Context of COVID-19?
The COVID-19 global pandemic has resulted in serious restrictions on how we go about our day-to-day lives has led homeowners and insurers to raise questions about policy wording and insurance coverage related to COVID-19. What if a homeowner is unable to travel home from Peru or must have treatment in hospital due to COVID-19, resulting in an unoccupied home for more than 30 days?
The Unoccupied/Vacancy Exclusion
An insurer is entitled to know how a premise is being used. A vacant or unoccupied home presents a different risk than one that is being occupied. To put it simply, if a home is not occupied, there is higher risk that property damage can occur from an insured peril such as fire, flood of theft. As such homeowner policies will contain what has been coined as the “vacancy exclusion” to allow an insurer to deny a claim if the claim occurred during more than a certain number of days of vacancy.
Most homeowner policies will differentiate between a vacant and an unoccupied home. A vacant home is one where the dwelling is not furnished for normal habitation or the occupants have moved out with no intention to return. An unoccupied home is one that has not been lived in for thirty consecutive days. Most insurers will require that a homeowner notify them if the home is being unoccupied or vacant to allow the insurer to amend the terms and condition of the insurance policy if necessary. A failure to comply with this notice condition may result in an insurer denying coverage for a claim or voiding the policy altogether.
The COVID-19 travel restrictions and, in some countries, travel bans, may have made it difficult or impossible for homeowners to return to their homes. Worse yet, a homeowner may have to undergo treatment in hospital for more than 30 days, leaving a home unoccupied. A homeowner is required to notify its insurer if they are unable to return to their home after being away for more than thirty days, or if they may be in treatment for that amount of time, even if that absence was the result of a COVID-19 factors. A failure to notify their insurer may result in the insurer denying coverage for a claim that occurs during their absence.
Failure to Report an Unoccupied Home is Not a Material Change in Risk
Statutory Condition #4 of the Insurance Act requires that insureds report any material change in risk to their insurer, failing which an insurer can void the policy ab initio (as if it never existed). The statutory condition is in all homeowner policies. Consideration of the occupancy exclusion is separate from a consideration of material change in risk which would allow underwriters to void a policy ab initio. Change in the state of occupancy is likely a material change in risk but requires knowledge and control on the part of the insured, such as renting the home to tenants when it was stated to be occupied by the homeowner. However, failing to report that a home is unoccupied during the 30-day period has been deemed not to be a breach of the requirement to report a material change in risk.
Unjust Contract Provision May Prevent Insurers from Relying on Vacancy Exclusion
Section 32 of the Insurance Act contains an unjust contract provision which would likely prohibit an insurer from excluding coverage or voiding a policy ab initio if the underlying reason for triggering the unoccupied exclusion or the statutory condition related to material change in risk were caused by COVID-19. Section 32 provides that:
- if a contract contains any term or condition… that is or may be material to the risk, including, but not restricted to, a provision in respect of the use, condition, location or maintenance of the insured property, the term or condition is not binding on the insured if it is held to be unjust or unreasonable by the court before which a question relating to it is tried.
If a homeowner is forced to go to court to enforce coverage against an insurer that has denied coverage due to the occupancy exclusion, the homeowner may rely on s. 32 to argue that it would be unjust or unreasonable for the insurer to enforce the occupancy condition given the COVID-19 travel restrictions. The application of s. 32 has not been tested in the context of a global pandemic such as COVID-19 but we expect that a court will afford a homeowner some leniency in failing to comply with the strict notice requirements under a policy if they are prevented from returning to their home due to the COVID-19 travel bans. With that said, homeowners should take precautions when leaving their home unoccupied for an extended period of time to avoid a potential loss, such as asking a friend or neighbor to visit the home every few days.
We do not recommend that insurers make any blanket policy changes or broad communications about the enforcement of the “unoccupied exclusion”. Rather, each claim should be considered on its own as coverage depends on the circumstances of each case and the specific policy wording. Any blanket policy change or broad communication may have the unintended consequence of estopping insurers from relying on the vacancy exclusion as it can be regarded as having waived its right to do so.
Commercial insurance policies may also contain similarly worded vacancy exclusion clauses. The above analysis would equally apply to any species of policy containing similar clauses.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
I once stopped a vehicle being driven at 96 km/h in a posted 50 km/h construction zone. Approaching the passenger side, I spoke with the woman in the front seat and the young lady driving. When I explained why I stopped them, the woman suggested that she was unable to get the driver to slow down, and maybe I could do something about it.
The driver produced a learner driver’s license and no L sign was displayed on the vehicle.
To me, the solution was simple. The woman should have denied her daughter access to the vehicle unless she was willing to follow the traffic rules. The conversation told me that this was a known issue rather than a one time lapse on the part of the driver.
After they had departed and I sat doing the notes for the violation ticket I had issued, I wondered to myself if maybe it wasn’t so simple. Perhaps this woman should not have been given the privilege of teaching her daughter to drive. If the teacher is ill equipped to teach, the new driver will not learn what is necessary to drive correctly and safely.
Do parents read the Tuning Up for Drivers guide that their teen receives in the package with their new learner’s licence? The book contains 20 lessons to prepare for the class 7 road test presented in order for good skill development.
We all tend to think that we are better than average drivers, but I occasionally find myself in conversations with parents who tell me that their teen taught them about things that they were doing wrong when driving.
Yes, ICBC does test the new driver to see if they meet standards as they progress through the Graduated Licensing Program. These standards are much more stringent than they were when I took my driver’s test 30 years ago. The trouble is, attitude can easily be hidden for the duration of a test, but put back on as soon as the driver hits the highway alone.
Perhaps this young lady would be better off taking the complete GLP package at a driving school. She will receive instruction in both the mechanics and the ethics of being a good driver that she might not be getting at home.
Currently Nova Scotia, Quebec and Saskatchewan require a new driver to take formal training in order to get a full privilege driver’s licence. Given the level of complexity facing a learner driver today presented by both the vehicle and the driving environment, perhaps formal training should be mandatory in all provinces.
Drivers are often confused about the difference between a regulatory sign and an advisory sign. A regulatory sign generally has black characters or symbols on a white background and an advisory sign has black characters or symbols on a yellow background. So, what’s the difference?
The regulatory sign must be obeyed exactly as it is read. Examples of regulatory signs include speed limits, turn restrictions, parking restrictions and directional instructions. Failure to obey these signs is an offence and the driver may be charged if they choose not to follow the instruction.
If there is not a specific offence such as speeding or failing to stop for the regulatory sign, a traffic ticket for disobeying a traffic control device may be issued to the driver.
An advisory sign gives advance notice of conditions on or adjacent to a highway that are potentially hazardous to traffic. A driver may choose whether or not to follow the suggestion given by the sign. Ignoring the advice is not an offence in itself, but anything that happens because the signs are not given consideration may be an offence.
A common advisory sign is the large diamond shaped sign shows a black arrow on a yellow background telling drivers of a curve ahead. Underneath it is a smaller square sign with black lettering on a yellow background showing a speed of 30 km/h.
The example of the curve was chosen to illustrate a point. We have often seen these signs and then travelled around the curve comfortably at speeds higher than that suggested. In those cases the shape of the curve and the road condition could accommodate the vehicle travelling at the higher speed.
So why was the speed warning there? Often it is because the driver’s line of sight is restricted. This would prevent the driver from seeing and reacting to a hazard in or just beyond the corner unless the speed was at or less than that suggested. Heavy trucks may also be required to slow for the corner to prevent tipping over.
A relatively new (since 2012) advisory sign is black on a pink background. These signs warn of an emergency incident ahead and tell drivers to expect responders on the roadway. Proceed with caution as full temporary traffic control may not yet have been established.
Failure to obey an advisory sign is only an offence if something happens as a result of ignoring the advice and the offence is generally for the misadventure that occurs.
Need a quick brush up on what road signs mean? Drop by your local Driver Service Center (where you renew your driver’s licence) and ask for a free copy of Learn to Drive Smart. The signs, signals and road markings are explained in Chapter 3.