Frank Craig thought he had insurance.
He filled out paperwork, worked with a realtor and paid for a policy, but when his home in Merritt flooded in November of 2021, he found out his insurance wouldn’t pay for repairs.
“When you think you have all your ducks in a row, guess what? Life comes to you.”
Craig’s experience has prompted others to check their policies and analytics.
“You don’t know how good it is until you need it,” he said.
He is not alone in reviewing his policy. Other people who lost or had their homes damaged by extreme weather knew they were insurance did not meet expectations.
According to the Insurance Agency of CanadaCanadian insurance companies now spend about $2 billion a year on weather-related claims, up from an average of $422 million annually between 1983 and 2008.
“Insurance can and should be there to cover the risks and get you back to normal,” said Dan Sandink, director of research and Institute for Disaster Reduction.
However, people should make sure they ask the right questions to get the insurance that will truly protect their home in the event of a flood, fire or other extreme weather event.
What type of insurance is available?
Sandink said the place to start is to find out if a homeowner can actually get the insurance they need, especially for flood.
Some homes may not offer any type of flood insurance or have it at a higher price because of the risk.
There are areas in communities like Merritt where flood insurance can sometimes be thousands of dollars more than a person’s insurance premiums.
What do you pay?
And insurance will contract between the customer and the company, what is actually covered will vary depending on the agreement.
Generally, the insurance will not differentiate between a house fire and a fire so that the coverage is more transparent. But when it comes to flooding – it’s complicated.
Sandink said people need to understand that flooding on the ground, severe flooding, debris flows will all appear to have different proofs or additions to their policies.
“It’s important to be clear about what you want to cover and what you actually cover.”
What are your losses?
In some policies, the customer will be responsible for paying a premium in order to obtain coverage.
Sandink said people often pay higher deductibles in exchange for lower annual premiums.
This means that policyholders have to incur more costs up front in order to receive an insurance payout for something like a flood claim.
What difference will it make to reduce risk?
In some cases, Sandink said people may be required to take steps to reduce the risk of something like a flood or wildfire, in order to qualify for full coverage.
This may include putting in a back drain or using electricity in the event of something like flooding.
If a policyholder is developing a policy to reduce risk, they should check whether insurers will offer a lower rate.
What are hats?
In some policies, there may be limitations on certain types of coverage.
Sandink offers flood protection that can cover a building for the full replacement cost in the event of a fire, but only for a limited amount. but when it floods.
“These parts of your policy, these endorsements may have a different hat so it’s important to understand what you’re actually insuring.”
He encourages people to shop around with different providers to find the type of insurance that works for them and asks if there are any options to remove caps.
Increases in climate change
Rob de Pruis, the Insurance Agency of Canada’s director of consumer and business, says claims related to bad weather have increased significantly in recent years, but it’s important to stay on top of the perspective.
He said the entire industry pays out $40 billion dollars each year in claims. Although the $2 billion spent each year on climate change is significant, it is not a large percentage of the total.
Along with the increase in claims, more people are expressing their concerns about the advertising they have received.
Merritt Mayor Mike Goetz said that he has heard of many floods that have affected people who have struggled to manage the insurance system.
“We had some problems with a few companies that were really bad.”
However, de Pruis said people are often disappointed when they find out that the insurance they are paying for doesn’t cover what they thought it did.
“A lot of disagreements or misunderstandings are just people explaining their insurance, your insurance policy doesn’t cover everything.”
Kamloops Day12:55Consumers need to use home insurance to make sure they understand their coverage