Preliminary estimates from PCS-Canada Service show July’s thunderstorm set a record in Ontario for insured damages – estimates that come with a warning from the nation’s insurance association, cautioning the province to not foster a climate of higher insurance premiums.
“While these preliminary estimates are staggering, we do expect them to go even higher,” says Ralph Palumbo, the Ontario vice president for the Insurance Bureau of Canada. “The Ontario government is urged to acknowledge this and to exercise caution when it comes to imposing auto insurance premium and return-on-equity reductions without first introducing reforms that will reduce costs in the product. Without such savings, the government is almost certain to make a bad situation worse, ultimately for consumers.”
Those numbers – released earlier this week as the Alberta estimates are still being formulated – come on the heels of intense, heavy rains along the Burin Peninsula in Newfoundland, that resulted in flooding and damage to both municipal and provincial roads in Marystown and other communities last weekend, leaving several basements flooded.
Although Ontario was much-harder hit, Palumbo takes pride that insurers in the nation’s most populous province were able to step up and answer the call.
“The good news is that our industry was well prepared to handle our obligations to customers,” he says. “Damage caused by more frequent severe weather is just another situation our members must prepare for.”
Since IBC and The PCS-Canada Service started collecting data on insured losses caused by extreme weather events in Ontario, the previous most expensive event in Ontario was on August 19, 2005 for $671 million (wind/rain storm). In an average year the Canadian insurance industry pays approximately $1.7 billion in claims due to water damage.
Between July 8 and 9, the Ontario storm – with its record rainfall in Toronto – led to a power outage affecting at least 300,000 residents in Canada’s largest city, shut down subways, and left approximately 1,400 passengers stranded for hours on a commuter train filled with water.
The torrential rains washed out sections of track across the GO Transit rail system causing numerous delays and system shutdowns. Both Toronto Pearson International Airport and Toronto Island Airport reported significant delays and cancellations.
In the case of the Newfoundland flooding, IBC Vice-President, Atlantic Region Amanda Dean is urging homeowners to revisit their policies with their brokers and determine what – if any – coverage they have for overland flood or sewer back insurance.
“Sewer backup coverage is usually available and can be purchased as an add-on to policies,” she says. “Consumers should check to see whether they have purchased this coverage and call their insurance representative to report any insurable claims immediately.”
