Tag: cottage insurance

Categories
Cottage Life

This insurance company is one of the only ones that offers storm surge coverage

Photo Courtesy of Kulla Bennett

By the time Hurricane Fiona struck the coast of Atlantic Canada, wind speeds were well above 100 km/h and the rain was pouring so hard you couldn’t see through it. As the storm moved north along the coast, touching down in PEI, Nova Scotia, Newfoundland, and sections of Eastern Quebec and New Brunswick, houses were flattened, trees were uprooted and toppled across roadways, ocean waves devoured the coastline, and lives were lost.

At an estimated $660 million in insured damage, Hurricane Fiona is the most expensive weather event to ever hit the east coast, and the tenth most expensive in Canadian history, according to the Insurance Bureau of Canada.

But a handful of cottagers in PEI and Nova Scotia aren’t included in this insured damage data. That’s because most Canadian insurance companies don’t cover damages caused by storm surge—when the ocean rises above its predicted level.

With the climate changing so quickly, the risk modeling needed to develop prices for coastal flood coverage is highly complex. Without accurate risk modeling, the risk is deemed too high to make the coverage affordable and available, the Insurance Bureau of Canada says.

This means that many of the Atlantic Canada cottagers whose properties were swept away by ocean waves will have to pay out of pocket to rebuild.

A Guelph-based insurance company is trying to change this. In 2015, after watching floods ravage properties in both Calgary and Toronto, Co-operators Insurance introduced its Comprehensive Water coverage.

“We saw that there was an unmet need, and we felt compelled to offer a flood coverage that was more comprehensive and available to all Canadians, regardless of their risk,” says Michelle Laidlaw, Co-operator’s assistant vice president of national product portfolio. “What we’ve seen is that incidents of extreme weather, like flooding, in our country have become more sudden, more frequent, and more severe. This is a cost to Canadians, and we expect this trend to continue as we face a climate crisis.”

Co-operators launched its Comprehensive Water coverage in Alberta in May 2015. It’s since introduced the coverage across the country, making it available to Atlantic Canada in 2018.

The company’s Comprehensive Water coverage protects against storm surge, waves and spray caused by a hurricane or storm, flooding from a natural or man-made body of water, such as a pond or river, flooding from heavy rainfall or snowmelt, sewage, and septic backups, and a rising water table.

It’s not an easy insurance product to provide, Laidlaw admits. With the climate crisis accelerating, the way the company calculates risk and premiums is always changing. “It’s a risk-based pricing model,” she says. “What that means is that some clients who are in higher-risk areas will have a higher cost. So, premiums are based on the client’s specific needs and the risks associated with their property.”

When calculating premiums, the company looks at a complex list of factors, including a property’s proximity to water, its flooding history, its elevation, soil type, and whether it has a loss prevention device, such as a sump pump. Premiums are specific to a customer, meaning someone in a high-risk zone could pay thousands of dollars a year, while someone in a low-risk zone could pay hundreds.

The insurance covers all types of properties, including cottages, regardless of whether the inhabitant owns or rents. According to Laidlaw, 60 per cent of Co-operators’ Atlantic Canada clients have purchased Comprehensive Water insurance. The company is the third largest insurer in Atlantic Canada, accounting for 11 per cent of the market share.

Co-operators’ claims team is on the ground in Atlantic Canada, working to provide support to its clients by processing claims as quickly as possible, including damage caused by storm surge.

“We continue to educate and promote this product in Atlantic Canada and across the nation. We are encouraging our clients to take this product and to be aware of their flood risks,” Laidlaw says. “We know it’s significantly changing the landscape of where Canadians choose to live.”

Categories
Cottage Life

Timelines for repairing storm damage bleak as insurance and contractors grapple with surge in requests

Photo by Shutterstock/Paul McKinnon

The insurance industry is still calculating the cost of damage caused by the wind storm that ripped through Ontario on May 21, but adjusters are already saying it will be well over $30 million.

“Based on what we do know, it is a very significant event. This will be considered a catastrophe in insurance terms,” says Rob de Pruis, national director of consumer and industry relations with the Insurance Bureau of Canada (IBC). “An event that has $30 million or more in insured damages is formally tracked as a catastrophe.”

During the storm, tornadoes touched down in London and Uxbridge, winds snapped hydro poles and toppled transmission towers in Ottawa, and trees crashed through roofs in Peterborough. Insurers are working around the clock to process all of their customers’ claims, de Pruis says. But even with the extra effort, it could take weeks before an insurance adjuster is able to look at your claim.

“We’re dealing with not only homes, vehicles, and businesses, but also secondary residences like cottages, as well as aircraft and marine, and all these other areas that can be impacted,” de Pruis says.

Insurance companies have catastrophe response plans in place for major events, such as the May 21 storm. When the plans are implemented, the insurance companies sort their claims into a priority sequence. “People that have significant damage where they can’t live in their property would be put into a higher priority than someone who may have a vehicle that’s dented,” de Pruis says.

Other factors that can delay a claim’s processing is finding a contractor to do the necessary work. Kevin Stairs of Glenwood Construction out of Peterborough says he’s been swamped with calls, but due to project commitments booked before the storm, requests for work on major structural damage are being pushed into 2023. Some projects are being scheduled as far into the future as 2024, he says.

“If you go back even a few years, the Peterborough area had the 407 coming then the housing market started heating up, and then COVID, and catch up due to supply chain issues. So, most good contractors are booking months and months out,” he says.

When he can, Stairs is slotting in smaller projects that take a day or less, such as replacing a window that got broken during the storm. But the lack of availability of local contractors is forcing many people to hire contractors from out of town.

“I would advise anybody that calls us, if we can’t get to them right away, which in most cases we can’t, to do their research on the contractor they’re calling, especially if they’re from out of town,” Stairs says. “Don’t pay a deposit until you’re certain that the person is going to come back and actually perform the work.”

Before you have a contractor start working on your property, make sure you document the damage from the storm for your insurance claim. Once it’s safe to do so, de Pruis suggests taking pictures and videos of the damage and writing out a list of all the damaged and destroyed items.

If you have receipts for any of the damaged items, make sure to collect those for the insurance adjuster. Even if you’ve documented the damaged item with a picture, don’t dispose of it until after the insurance adjuster has had a chance to fully assess your claim. They may want to see the damaged item in person.

Will the storm damage cause my insurance premiums to rise?

Some good news on the insurance front is that the damage from the storm shouldn’t increase your premiums. “Typically, no one single event leads to an automatic increase in insurance premiums. The insurance companies are well prepared and very well capitalized for these events. This is what they do. This is what they’re here for,” de Pruis says.

“The principle of insurance is the premiums of the many are paying for the losses of the few. The more you can spread out that risk over larger areas, the more stable premiums become so that particular communities are not significantly impacted or have significant changes in premiums because of one event.”

Since most insurers are global companies, a storm in Ontario won’t affect premiums. What will affect premiums, de Pruis says, is a steady increase in the frequency and severity of weather events.

“Between 1983 and 2008, the insurance industry was paying out on average about $422 million in severe weather-related losses across the country. Over the past decade, that number has increased to over $2.1 billion on average, annually. That’s more than a four-fold increase in the overall costs of severe weather damage,” de Pruis says.

Most home and recreational property insurance plans will cover severe weather, such as wind damage. But to make sure you’re covered, de Pruis advises reviewing your policy.

“A lot of this conversation is about preparedness. To make sure that people do have some type of a plan. Even something as simple as knowing what phone number to call if you do have a claim,” de Pruis says. “Having that information readily available so you can start the process can be very helpful.”

Categories
Cottage Life

Cottage Q&A: Buying boat insurance

By freevideophotoagency/Shutterstock

I need to insure my powerboat, and my current company will not insure craft over 55 hp. Are there companies that will do this?—Mark Wakefield, Apsley, Ont.

Yes. Some seasonal-home insurers offer boat policies as a separate product. And some companies are marine specialists and insure nothing but boats and PWCs. 

It’s normal for home or seasonal dwelling policies to have limitations with respect to watercraft, says Bev Mitchell, a special risks underwriter with Johnston Meier Insurance Agencies Group in Maple Ridge, B.C. Length and horsepower restrictions are very common. “It makes sense if you think about it,” says Mitchell. “You’re more likely to injure a third party if you run into them in the water with a motorized boat than if you run into them with a kayak.”   

Cottage Q&A: Fire insurance for woodstoves

“A lot of companies will say, ‘No, we’re not going to touch that,’ ” says Jared Chartrand of Northstar Marine Insurance in Barrie, Ont. “They’ll say, ‘We’d be doing you a disservice.’ ” But for a company that deals in boats, it should be no problem. Fifty-five horsepower “is not a lot of horsepower,” says Chartrand. “We’ve insured boats that are 1,000 hp.” 

  Even if you have only small, motorized boats that fall under your cottage policy, it may be worth paying for a stand-alone marine policy—you’ll get more robust coverage. “The primary reason that you take out a policy to cover your cottage is to cover the building and its contents,” says Mitchell. “Not to insure your boat.”

Cottage Q&A: Cameras and reducing insurance costs

This article was originally published in the October 2018 issue of Cottage Life magazine.

Got a question for Cottage Q&A? Send it to answers@cottagelife.com.