February 22, 2018
(Vancouver, BC): As the flood waters recede in many areas across Ontario, the long process of recovery begins. But who will bear the costs of these damages?
Municipal, provincial and federal governments; insurance and reinsurance companies; and individual businesses and residents will carry their own responsibilities to pay for repairs, but the proportion of damages each party will incur is unclear at this time.
This information is particularly unsettling for individual businesses and residents, understandably, and many are struggling to understand what insurance policies cover. That’s because each class of insurance treats flood damage differently.
Protection against flood damage can be added to most commercial insurance policies purchased by businesses, condo corporations and farms. Similarly, protection against flood damage is typically included in the comprehensive coverage option available under most auto insurance policies.
On the other hand, flood damage is specifically excluded from most home insurance policies in Canada. Government assistance programs exist for homeowners and tenants suffering flood damage. It’s important to note that flood damage is distinct from water and water backup damage. Most home insurance policies provide some form of protection against water backup and broad water damage. In some cases, you may need to specifically add, and pay for, this protection.
Adding to the confusion for homeowners and tenants is the fact that seemingly similar home insurance coverages, like water backup protection, can differ by company. For example, some policies exclude loss or damage caused both directly and indirectly by flood. If your policy excludes damage caused indirectly by flood, then you may not be protected against water backup damage even if no flood waters entered your home. That’s because the water backup damage was indirectly caused by flood.
The first step is to file a claim with your home insurance provider, which you should do even if you suspect your claim may not be covered based on what you’ve heard from others. Each insurance company offers different coverage, as mentioned earlier, so your policy may be unique from for neighbours even if you both are insured by the same company. For example, you may have added water backup protection to your policy whereas your neighbor may not have. Your claim will be assessed based on your policy and situation.
Your next step should be to apply for a ssistance from the Ontario Disaster Recovery Assistance Program. For information on this Program, visit their website. You should apply for assistance even if you are waiting to learn if your home insurance claim is covered. If your claim is covered, your insurance company will assist you with the repair process.
If your claim is not covered, ask for a letter indicating as much. This letter will assist you if you choose to escalate the matter, details on which can be found below. You may also need to submit this letter as part of your application to the Ontario Disaster Recovery Assistance Program.
Next you’ll want to begin your clean-up. Take notes and pictures of the damage to your home and property. Keep track of the hours you spend cleaning and the costs you incur. You will need to submit these to the Ontario Disaster Recovery Assistance Program, which will assess your application. If your application is approved, the Program will provide assistance as described on their website.
Contact your insurance provider right away if you have been ordered to evacuate or if your home has already suffered damage from the floods. Your insurance provider will open a claim file, advise you whether the flood is covered and proceed appropriately.
Your insurance provider’s claims number can be found in your policy package or on its website. Square One customers can report a claim directly using their online account, or call 1.855.331.6933 and press 2 when prompted. When you call your insurance company, make sure you have 5 to 10 minutes of time for a thorough conversation, and try to have the following information on hand:
Depending on your immediate needs and on your policy’s coverage, your insurance provider may be able to issue an immediate advance payment for emergency expenses that you incur during the evacuation. Insurance providers are likely taking a great many new claims as a result of this catastrophe, but Square One customers can rest assured that an adjuster will be in touch with all possible urgency.
For most insurance customers whose policy covers inland flooding, your policy deductible will apply. Your deductible, which you chose when you purchased your policy, is the amount of any loss that you must pay personally before your insurance company steps in to pay the rest. Your policy document will show this deductible, and your insurance provider’s claims staff can confirm this for you.
For the time being, most residents of Brantford will need to wait and see what happens during the evacuation. Many homes will remain undamaged, while others may suffer water damage that will need repair or even total reconstruction.
Once the evacuation order has been lifted, residents will be able to return home to determine the extent of damage that their homes may have suffered. When you return to your home:
The insurance industry hasn’t always had the best reputation, but in recent years things have changed. Today, most companies try to find ways to cover (rather than deny) claims based on policy terms. Nonetheless, disputes, mistakes and misunderstandings do happen.
If you have concerns with your home insurance claim or wish to escalate it, take a few minutes to write down your concerns and what you believe should be done to resolve them. Then, contact the individuals or organizations listed below.
The adjuster handling your claim. Share your concerns and proposed remedies with the adjuster and ask for an explanation or a response. If you speak with the adjuster, follow-up your conversation with an email and ask the adjuster to do the same.
The agent (or broker) who sold you the policy. Share your concerns and proposed remedies with them, ask them to contact the insurance company to appeal on your behalf and request that they review your policy to make sure you’re properly covered.
The insurance company’s claims manager. If your concerns are still not addressed, ask the handling adjuster to escalate the matter to the company’s claims manager, director or vice president. Again, request any explanations or responses be provided to you in writing.
The insurance company’s ombudsperson. All insurance companies in Canada are required to have an ombudsperson. This person is responsible for reviewing and responding to complaints, not just those relating to claims. Before approaching the ombudsperson, make sure you first attempt to resolve the matter with the handling adjuster and claims manager.
The General Insurance OmbudService (GIO). This organization provides consumers with a free, independent and impartial process to resolve auto, commercial and home insurance complaints. Before you can apply to the GIO for assistance, you must first attempt to resolve the matter with the insurance company’s ombudsperson.
The provincial insurance regulator. The insurance industry in Canada is highly regulated. As such, you have the option of filing an official complaint with the provincial insurance regulator. As is the case with the GIO, the insurance regulator will often require that you have exhausted all other options before they will review your complaint.
In addition to the individuals and organizations listed above, you can contact your local Better Business Bureau to file a complaint. You can also take legal action against your insurance company. Taking legal action should be your very last resort as this will be your most costly option.
Most home insurance policies in Canada include coverage for additional living expenses incurred as a result of a civil evacuation order, as long as the policy covers the cause of the evacuation. Not all home insurance policies in Canada cover inland flooding, but if your policy does then you may also be covered for additional living expenses incurred due to the mandatory evacuation order.
The amount of coverage can vary depending on the policy you have purchased, but it’s a basic feature included in most policies. Be sure to keep track of additional expenses that you incur, which could include:
While your policy will not pay for ordinary day-to-day expenses that continue during the evacuation, you may be entitled to claim the additional costs that you incur as a result of the evacuation order.
If the process of evacuation and recovery is becoming more than you can handle, reach out to local counselling services for help. The American Psychological Association has also published free guidance for individuals suffering from a catastrophe. To learn more, visit www.apa.org/helpcenter/. This article was written to help individuals and families dealing with catastrophic wildfires, but its information is helpful in other catastrophic situations as well, such as a major flood.