Record floods lead to idle brokers

Ontario’s Ministry of Natural Resources called it a 1-in-100-year flooding event. Snow runoff, combined with 50 mm of rain during a 24-hour period on April 20, caused water levels to rise, swamping cottages and commercial businesses in low-lying areas. 

 

And so it was surprising to hear brokers in the affected communities describe the flooding as almost a non-event.

 

“Yes, they called a flood emergency,” said David Johnson of A.W. Shier Insurance Brokers Ltd.  in Bracebridge, Ontario. “We’ve had news crews coming through here like chickens with their heads cut off, and yet really there’s not a heck of a lot of story.

 

“We have not as many claims as I might have expected. There are only half a dozen to a dozen houses on the flood plain that are affected. They are affected every year. This year just happens to be worse.” (continued.)

 

Brokers in Huntsville and in Peterborough, two of the harder-hit areas, agreed with Johnson. “It all depends on where you are and where you are building and where your stuff is,” said a broker in Huntsville, who did not wish to give his name. “I think Huntsville might have been a bit worse based on the fact that they have some businesses right near the water, and Bracebridge doesn’t have many businesses right down by the water.”

 

Brokers in the Kawartha Lakes District also reported little claims activity. “We haven’t had anything, to be honest, as far as the flooding is going,” said Jackie Seifried of Topping Insurance Brokers Ltd. in Peterborough. 

 

And so why has the media storm not been linked with insurance claims in the area’s brokerages? 

First, overland flood damage is not covered under home insurance policies, brokers in the areas said.

 

“By and large, most people know that flood isn’t covered under a homeowners’ policy, so if your boathouse is filled with water, [clients are] not going to call [to report] it,” the Huntsville broker said. “They might call to say, ‘There’s really no coverage, right?’”

 

Second, the floods happened in late April, about a month before the holiday weekend in May. This is just before cottagers traditionally head north to open their cottages for the spring and summer vacationing season. 

 

“We do insure a lot of cottages as well that are on water, and [clients] may not even know yet if they’ve had any damage,” said Seifreid. “They usually start coming up in May. We may get some calls, we may not.”

 

Huntsville saw some damage to its low-lying downtown core area, which is near a river that flooded its banks. But commercial policies, which do cover overland flood, nevertheless carry large deductibles, brokers in the areas say.

 

“One commercial client called us, but they didn’t have flood [coverage],” Johnson said. “And if they did, they’d have a $10,000 to $20,000 deductible. The deductibles are high.”