With Hurricane Fiona teaching Atlantic Canada the hard lesson that standard homeowners insurance policies typically do not cover storm surges, one insurer’s comprehensive water product may hold the key for coastal property insurance moving forward.
In a Press release, The Co-operators stated that it is currently the only insurer in Canada to offer coverage for damages to coastal property caused by storm surges – coastal flooding caused by the abnormal rise in seawater level.
In an interview on the CBC program Island Morning, The Co-operators executive vice-president Lisa Guglietti explained that after the 2013 floods in Calgary and Toronto, the insurer found that existing water damage coverage was both tricky for clients to understand and for adjusters to evaluate. Coverage was completely dependent on where the water came from, and it was tough to determine the exact origin.
"It was really clear for us coming out of the 2013 floods in both Calgary and Toronto that we needed to provide a better solution for Canadian homeowners," said Guglietti, who added that it took five years later for The Co-operators to create a partial solution, and another two for the coverage to be made available throughout Canada.
The comprehensive water insurance product developed by The Co-operators is noted to be more detail-intensive than the usual property insurance policy.
"It really does get into the specifics of a property. Our model actually gets into things like exact coordinates of where a home is located, the longitude and latitude, it looks at things like elevation, proximity to water, soil type, so it's very specific to the risk," said Guglietti. "If you live in a high-risk zone, your premium is going to be higher."
The executive vice president said that about 60% of The Co-operators’ Atlantic Canadian customers have purchased the comprehensive water insurance product. Guglietti also mentioned that the biggest challenge in offering the product is that risk models need to be able to look ahead into a future that is becoming even more uncertain thanks to the impacts of climate change.
The spotlight on The Co-operators’ comprehensive product comes after the Insurance Bureau of Canada (IBC) revealed in a previous statement that the rest of the industry is hard at work developing the risk models for storm surge coverage. IBC also said that there have been conversations with the government on creating a private insurance program for overland flooding.
