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INSURANCE ADVICE


Disaster Insurance: Is Your Home Covered?


Many Canadians don't review their home insurance policy until disaster is at their doorstep. As a result, they don't know if they're covered in the event of a fire, flood or earthquake. It's only when we're most likely to be affected that we have sufficient incentive to take action.

But when it comes to insurance, that's too late. When a disaster strikes, whether natural or man-made, insurance companies can’t sell coverage to people who are in the affected areas:

  • Within 25 kilometres (50 km for some companies) of an active fire.
  • If there’s an imminent threat of a flood, a state of emergency or an evacuation order because of a flood.
  • Within 100 km of the epicentre of an earthquake measuring 3.0 or more on the Richter scale (5.0 for some companies) for 7-10 days.

People often assume that there’s a federal or provincial safety net they can rely on if a disaster occurs and they aren't insured. However government relief programs like the Disaster Financial Assistance program are only available to people for whom insurance coverage was not available.

Further reading: How do overland flood policies affect Disaster Financial Assistance eligibility?

What that means is that British Columbians need to be proactive about reviewing their home insurance policies and making sure they have appropriate coverage before disaster strikes.

Here are some of the common gaps customers aren't aware they might have and how to fix them.


Fire coverage

Your basic home insurance policy will cover your losses from a fire and it's pretty standard across all insurance companies.

Make sure is that you are honest when buying your policy. In other words, don't bend the truth thinking you can save a couple dollars on your premium.

  • Are you operating a small business out of your home?
  • Do you have a wood stove?
  • Are there any short-term rentals, such as airBNB or VRBO anywhere on the property?


Earthquake coverage

Earthquake coverage does not come with your basic policy but you can get it as optional coverage.

It covers:

  • Your home (the physical building structure and any detached outbuildings) and
  • Its contents (your stuff)

Any earthquake insurance will cover the full cost of your home. When it comes to the contents, you can choose to insure anywhere from — depending on the insurance company — 0 to 100 percent of the value.

If you live in an area that's susceptible to earthquakes, make sure you have the coverage you need were the worst to happen. If you choose not to purchase earthquake insurance, you will not be eligible for government assistance should an earthquake strike.


Flood insurance

Water damage is by far the most common property damage claim in Canada and it has been steadily growing. In 2008-2009, the average damage across the country caused by severe weather was $100 million. Today, it stands at $400 million.

Not all floods are the same. There are four types of coverage available to protect against water damage:

  • Service line for damage that occurs when a municipal pipe bursts on your property.
  • Sewer backup for when the sewer or septic system overflows.
  • Overland water covers damage due to fresh water flooding. This is when a river or a lake burst their banks and flood your home. Overland water also covers you when there's flooding due to a heavy rainfall.
  • Ground water covers the damage caused when water soaks into the ground and then enters your home through the walls or floor. It also covers damage from the rising of the ground water table by underground rivers or streams.

Water damage affects everybody. It doesn't matter if you live near a lake, by a river or on a flood plain. You might have higher risks in some instances, but water affects everyone. A heavy rainfall could flood any home and easily cause tens of thousands of dollars' worth of damage.

  • Review your policy to understand what your insurance covers,
  • Get the full policy limit available.


Flood insurance when you live in a condo

When you're living above ground in a condo, you may think that you don't need to worry about flooding damage.

However that's not entirely true. Flooding causes other damage than just rising water levels (structural, electrical...)

You might think your property or contents are not at risk in a flood because you live in a high rise, but anytime there is flooding, you might need to be evacuated.

Evacuations are covered under your policy even if there isn't a loss (damage to your stuff), providing policyholders with living expenses if they need to be displaced in an emergency.


Protecting the new home you just bought

When you buy a new home, you typically can't purchase insurance more than 30 days before your closing date.

You could end up in a tricky position if a disaster were to hit the area. As insurance companies can't write new policies, you wouldn't be able to obtain insurance and therefore your mortgage funds wouldn't get released.

There are two steps you can take to protect yourself from this stressful possibility:

  1. Talk to your realtor about adding an insurance condition clause;
  2. Get the coverage when you're able to.


Protecting your Corvette or ATV

Your home insurance policy doesn’t cover any vehicle you store in your garage or carport (the cars you drive are covered under car insurance, provided you have comprehensive coverage). Everything else in your garage: your tools, fishing equipment, treadmill and weight rack are covered as contents.

But any vehicle that is being stored — whether it's a recreational vehicle (campers, ATVs, dirt bikes, snowmobiles, jet skis, etc.) or a leisure car that you only drive for a couple weeks every year — requires storage insurance.


Tenant Insurance

Approximately half of renters in BC don't carry any home insurance.

Replacement costs for even the bare necessities can easily reach $20,000. And that's just the start of it. If your apartment building burns down, you're going to have to live somewhere else and those costs can also start adding up quickly.

Plus, if you're found to be negligent for a loss (i.e. it’s your fault), whether for an injury, a flood or a fire, you’re going to need personal liability to cover the court costs.

Simply put: if you're a tenant, you need insurance. Tenant insurance can cost as little as $20 a month: a small price for peace of mind.


Customize your coverage to fit your lifestyle with Right For Me™ Home Insurance. Members save up to an additional 20%.



Home Insurance: Facing Natural Disasters

When it comes to home insurance, cutting corners simply isn't worth it. The cost of a claim and the impact it could have on your personal livelihood it could have are too significant to take lightly.

It is worthwhile to take a few minutes to:

  1. Review your existing home insurance policy and understand what it does and does not cover
  2. Talk to your insurance broker to make sure you are properly covered for an emergency before it strikes,
  3. Keep a current home inventory checklist, make an emergency plan and assemble a disaster safety kit so you're fully prepared in the event of an emergency.

The Insurance Bureau of Canada has terrific emergency preparedness resources, including a 72-hour emergency preparedness plan for you and your family.

Don't wait to review your home insurance policy for when it's more convenient. Not only will you end up with better coverage for your home, you will get peace of mind knowing that you are prepared to face whatever Mother Nature will throw at you.


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