Answers To Your Pressing Questions About Hurricane Claims
HALIFAX — A lot of folks in Atlantic Canada are going through the insurance process after Fiona raged through the region in late September. Thousands of people are still waiting for power and the total damages will take a while to be calculated.
Initial estimates from DBRS Morningstar suggest insured losses could range from $300 million to $700 million. While talking to Huddle, however, Amanda Dean, the Atlantic vice-president for the Insurance Bureau of Canada, said it’s still too early to know for sure how much insurance money will be paid out.
For comparison, insurance companies paid out $156 million in 2019 for damages caused by Hurricane Dorian. Hurricane Juan caused $192 million worth of insurable damage in 2003. These numbers, provided by the IBC, are adjusted for inflation.
Following such a heavy-hitting weather event, homeowners everywhere have a lot of questions about claiming damage from insurance companies. We asked Dean about some of the common concerns and questions people have when navigating the claims process.
The questions and answers below have been edited for length and clarity.
Q: A lot of people are pessimistic about an insurance claim being successful after a hurricane or other natural disasters. We hear rumours and stories about insurance companies using an “act of God” clause to whitewash any responsibility. Is that just an insurance myth, or is there any truth to an “act of God” clause?
A: So that wording (act of God) is not in the vast majority of policies. Certainly, with the insurers that I’ve spoken with personally, they do not have the words ‘act of God’ in their policies.
In a hurricane event, there’s a lot of damage due to wind, there’s a lot of damage due to debris having been flown about causing damage to structures. Wind damage is covered under a typical home insurance policy. So those pictures that we’ve seen of trees, piercing roofs, and other objects through windows, that will be covered under a typical home insurance policy.
We’ve heard about sewer backups. Sewer backup endorsements are readily available. If you’ve had that on your home insurance policy, you will have coverage. Also, some insurers offer additional water endorsements so rivers that may have overflowed.
There’s also large pooling of water due to intense rain and that water entering the home. If you have that endorsement on your policy that will be covered.
Additional living expenses; If you need to stay in a hotel if you need to find alternate accommodation, that will be covered as well.
Q: One of the most common damages we’ve heard about comes in the form of food. The power outages caused a lot of food to go bad and be thrown out. Is that something people can typically claim?
A: Absolutely. In the industry, we refer to it as food spoilage and it’s typically covered. If you do have one of those claims to make, take pictures and itemize what was in your fridge and freezer. I know some of us may have thrown all of that out by now, but if you can remember what you threw out, have that conversation with your insurance representative.
Q: Some businesses have thrown away thousands of dollars’ worth of food. Are they typically covered as well?
A: Absolutely, depending on the type of business. So, corner stores, restaurants — they should absolutely call their insurance representative. And if the business can’t recall off the top of their head what their coverage is their insurance representatives will have had that information.
Q: What are some things that wouldn’t be covered on a “typical” insurance policy?
What’s not typically covered is debris removal: all the tree limbs scattered across your backyard. Now, if that tree limb is sticking through your living room window, that is an insured claim to fix your home and the removal of that that tree limb will be included in your policy.
Storm surge is another thing and, certainly, we saw throughout the region in Cape Breton, Newfoundland, and PEI. Coverage for storm surge impacts is something that is not readily available in Canada at this time.
Q: What kind of timeline can people expect in hearing back about their claims?
That will vary from insurer to insurer. It will also vary based on the damage incurred. Insurers are going to prioritize the worst damage first, because those will be the people who are physically displaced. We are really encouraging people to call their insurance representative as soon as possible.
Q: Can homeowners in Atlantic Canada expect their premiums to go up next year, because of Fiona?
A: It’s no secret that the premiums within an area have to go towards paying the claims. However, no one particular event dictates what those premiums will look like. This will all be considered annually by insurance companies because they have to be able to ensure that there’s a pool of funds to pay for the claims that are coming next year.
Derek Montague is a Huddle reporter in Halifax. Send him your feedback and story ideas: [email protected].