We can all recall the videos of Fort McMurray residents fleeing their homes with the blazing wildfires at their heels. Catastrophic events like this one, or the floods in Calgary a few years before, cause severe damage in the short term and rebuilding heartache in the long term.
The Fort McMurray wildfire is now the costliest insured disaster in Canadian history. The Insurance Bureau of Canada (IBC) has estimated the total cost will likely reach $3.58 billion. Almost 2,400 buildings and homes were destroyed in the May 3rd fire. Thousands of vehicles were also destroyed.
Insurance companies will be tasked with many types of claims; rebuilding of homes and business buildings, replacing contents and personal belongings, replacing vehicles, environmental and debris clean-up, hotel and lodging costs, and claims to cover businesses’ loss of revenue. With Fort McMurray thousands of claims were filed in the days after the fires.
What Does This Mean for the Average Homeowner?
Knowing what you’re covered for is the first step. Do you know what limits you have for additional living expenses, which will allow you to go to a hotel while your home is unlivable? Do you have a list of your personal belongings, which makes it easier to get them replaced in a claim situation? Unfortunately, many people don’t think of the worst case scenario and don’t have the required documentation. However, having a broker in your corner, to help guide you and offer claims counselling, helps when dealing with an insurance company.
Related Read: Disasters Come Unexpectedly. Are You Prepared?
Another issue is that the volume of claims can make rebuilding take longer. Why?
Construction costs rise sharply after natural disasters because there are labour and material shortages. Labour and materials must be brought in from further away, causing costs to increase. The greater the disaster the further away insurance companies need to look for contractors and supplies.
For this reason having Guaranteed Replacement Cost on your homeowner’s insurance policy is so important. Any cost increases associated with labour or supply shortages will still be covered by your home insurance policy.
The sheer number of claim applications in a disaster also means it will take longer for adjusters to process each one.
In a catastrophic event keeping all your documentation secure is important. Your broker will have copies of your insurance policies if you need to access them.
Knowing how to escalate your claim issues is also important. Speaking with claims management and getting your broker to help are good places to start.
You can also contact your insurance company’s ombudsman.
Have any comments or questions? Let us know in the comments section. Thanks for reading.
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