While June in Toronto isn’t often associated with catastrophic weather, the metro area experienced just that on June 22, with insured damages now exceeded $30 million, according to estimates from Catastrophe Indices and Quantification Inc. (CatIQ).
Much of those losses are attributed to heavy rains and wind, which resulted in localized flooding throughout Toronto and as far west as London. Toronto primarily suffered from pooled water that shut down intersections and canceled its early morning GO trains, while London’s inundated sewer system flooded countless residential and commercial properties.
In addition, 100,000 residents in southern Ontario experienced power outages.
While this storm would once have made headlines because of its rarity, these meteorological phenomena are becoming increasingly common in Ontario and, more broadly, Canada.
“It’s not really an anomaly anymore,” said Pete Karageorgos, director, consumer and industry relations at the
Insurance Bureau of Canada. “The reality is that we’re seeing severe weather happen with greater frequency and regularity.”
He points to July 2013’s near-billion dollar storm in Toronto, last year’s $1 million storm in Burlington, and recent tornadoes in Goderich, Ont., and Angus, Ont., as evidence of this.
Karageorgos hopes that these catastrophes serve as a call to action for brokers.
“Brokers should be talking with clients at their renewals and ensuring that they have the right coverage, especially on areas like sewer backup, which is not standard on some policies,” he said.
Brokers don’t see their responsibilities as ending there. It is also essential that they discuss the nuances of homeowners’ insurance, particularly with regard to little-known details inherent in most flood policies.
“Oftentimes people are surprised to find out that there can be a sublimit on sewer back up protection,” said Michael Brattman, president, Insurance Broker Association of Ontario (
IBAO).
“But if someone invests $100,000 in their basement, which is easy to do these days, brokers should help them find a policy that reflects that, so there’s no surprise in any event of a claim.”
Brattman feels that many of these particulars are overlooked since it differs from auto insurance, which is regulated and therefore doesn’t vary by carrier.
“On the property side, insurance companies can tailor a product specifically to how they want to do things,” he said. “So a broker representing numerous insurance companies should ask their clients what their needs are, what their basement looks like and how they can help.”
Both Brattman and Karageorgos applaud the industry, however, for beginning to take this type of coverage more seriously, and develop such needed policies as overland flood insurance.
“As the environment changes, the business environment has been changing as well to meet those needs of consumers,” Karageorgos said.
