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Steps for homeowners and tenants to recover from overland flooding

June 26, 2018

(Vancouver, BC): As the flood waters recede in many areas across BC, Alberta, and Ontario, the long process of recovery begins. Damages from the floods across Canada will be significant. The cost of these damages will be borne by:

  • municipal, provincial and federal governments;
  • insurance and reinsurance companies; and,
  • individual businesses and residents.

At this point, the proportion of damages each party will incur is unclear. Understandably, this is particularly unsettling for individual businesses and residents. What’s more, many businesses and residents 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, while some providers are starting to offer coverage, 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 backup damage. Most home insurance policies provide some form of protection against water backup 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 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.

So, what should you do if you’ve suffered flood damage?

The first step is to file a claim with your home insurance provider. You should do this even if you suspect your claim may not be covered. As mentioned earlier, each insurance company offers different coverage. Even if both you and your neighbour are insured by the same company, your policy may be different. For example, you may have added water backup protection to your policy whereas your neighbour may not have. Your claim will be assessed based on your policy and situation.

Your next step should be to apply for assistance from your province’s Disaster Recovery Program. 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 so. This letter will assist you if you choose to escalate the matter (see below). You may also need to submit this letter as part of your application to your province’s Disaster Recovery Program. Then, 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 your province’s Disaster Recovery Program.

Your provincial Disaster Recovery Program will assess your application. If your application is approved, the Program will cover the costs of repairing certain essential property. If you are still unable to return to your home, you may be eligible for the pre-loaded debit cards being offered by the government.

What if you have concerns with your home insurance claim or wish to escalate it?

Today, most insurance providers 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 the agent. Ask the agent to contact the insurance company and to appeal on your behalf. Also ask the agent to 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. Obviously, taking legal action should be your very last resort as this will be your most costly option.