Lost Property During The Wildfires? Here’s What You Need To Know About Insurance Coverage
HALIFAX–Wildfires in Nova Scotia are out of control, covering 10,000 hectares of land and damaging or destroying as many as 200 homes and other buildings. There will be a lot of suffering people who will need to navigate the insurance process. The Insurance Bureau of Canada has sent a mobile team to help. The team was at the Canada Games Centre in Halifax on Tuesday.
Huddle spoke with Amanda Dean, the Atlantic vice president for IBC, to help answer some of the more pressing questions people will have about insurance coverage. The interview has been edited for length and clarity.
Q: There’s so much for people to go through if they’ve lost a home or property. They’re without things like clothing. They’re relying on kindness for essentials. What is the immediate response from the insurance company in terms of what to prioritize?
A: Most home insurance policies, tenant insurance policies, and condo unit owner policies, have a section called additional living expenses or ALE. And what that covers are your additional living expenses over and above what you’re paying for property taxes, your mortgage, and all of those things. What you need while you have been evacuated from your home. So keep those hotel bills, keep those bills from the laundromat. And when you’re ready to just start that claims process with your insurance representative, make sure that they get those receipts because that will form part of your additional living expenses claim.
Q: Would food costs while they’re living in a hotel be covered? Or would that not be an additional living expense?
A: That wouldn’t be considered an additional living expense. It’s for anything that you wouldn’t be paying for if, you know, life was carrying on as normal. So, those hotel bills or, if you’re lucky enough, finding accommodation to rent, those costs are over and above what you would normally be paying at this point in time.
Q: If somebody does try to find a place to rent, we know how expensive it can be right now. Do these policies usually come with a time limit or cap on the amount that will be covered?
A: There is usually either a time limit or dollar limit or, in some cases, there could be both. That will vary from policy to policy. It depends on the insurance company that you’re with. It also depends on if you bought a basic policy, versus a more robust home insurance policy. So, keeping all those receipts and having that conversation with your insurance representative will help the process move along more quickly.
Q: Given how many claims are expected to be pouring in from Nova Scotia, what does the insurance industry in Atlantic Canada consider a reasonable time limit for processing so many claims at once?
A: In terms of getting all the information and getting the claims process started, that can happen relatively quickly. Insurers will pull in some of the resources from other parts of the country. Insurers can also pull in folks from other departments within the company to help assist the claims department.
Once the fire is under control, adjusters can be on-site to confirm a few things. That will play a part in how these claims move along. Now the tricky part is going to be the availability of building supplies and the availability of contractors. Following Hurricane Fiona last fall, there are still a number of claims that are still in the process due to the availability of contractors, construction professionals, plumbers, roofers, you name it, in addition to the accessibility of building materials. Insurers will work as closely as they possibly can with all vendors and all contractors to get people back on their feet as quickly as possible. But in this type of a scenario, it’s going to take some time.
Q: There will probably be some people who may have lost additional property, including vehicles. Usually, vehicle damage is due to an accident or something that happens while driving. In these extraordinary circumstances where a vehicle is lost due to a forest fire, will that typically be covered?
A: That is something that would be typically covered if you had a comprehensive or “all perils” coverage on your policy. That is not mandatory coverage. It’s mandatory to carry liability, third-party liability, and things such as that. So, that’s when you need to have that conversation with your insurance representative.
Q: In terms of belongings and property inside a home, is there any circumstance where certain items wouldn’t be covered in a fire?
A: There will be a limit on the amount of money for items that you lost. So that limit will be outlined in your policy. There are limits for the structure, there are limits for contents, and then there’s limits for outbuildings (such as garages) and their contents. Typically, those that have (luxury items like) artwork and jewelry, there are limits for those types of belongings as well.
Q: Right now, the immediate concern is those who have suffered loss due to the wildfires. But looking long-term, what kind of effect will such a disaster have on people’s premiums? It wasn’t even a year ago that millions of dollars’ worth of claims were filed for Hurricane Fiona in Atlantic Canada.
A: It may (cause an increase) claims drive premiums. It is a fact of the insurance industry. So, the more claims that there are, the more premiums need to be collected just to insure that pot of money is there if something were to happen. It certainly will add up. Wildfires are something relatively new on our horizon and we’ve had a particularly dry spring; we’re used to very wet springs. A lot remains to be seen on what this will do to actual premiums that we see next year and the year after. A lot of factors will go into the numbers.