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Fort McMurray floods: an escapable event for insurers?

By: , Published on , Last Update on June 21, 2016 12:08 PM


Fort McMurray is feeling the brunt of poor climate again. The town is still recovering from the wildfire that caused devastation in northern Alberta last month, but now has to content with flash flooding. 85,000 residents were displaced by the fire that claimed 2,400 properties, and the trickle of people heading back home will continue until June 15.

However, those residents are now finding their properties underwater thanks to torrential downpours that have hit the region. 47 millimeters of rain have fell on the town. While rain would be welcome after the fire dubbed the “Beast” this much has caused flash flooding and have actually “increased hazardous conditions” according to Alberta Agriculture and Forestry.

The group is now saying residents should avoid burnt areas because the rain water could cause dead trees to fall. The Beast was the costliest insurance loss in Canadian history, claiming 10% of Fort McMurray, and the floods could now see insurance companies face even more claims from homeowners in the area.

Insurers may be able to avoid double claim situations, simply due to the fire which has already caused so much damage. However, it remains to be seen how many flood claims will come from homeowners with property previously unaffected by the flames.

“It’s not a usual case of flood,” says George Hodgson, CEO of the Insurance Business Association of Alberta.

“Fort McMurray wasn’t fully operational, and now we have a flood – is a house that’s burnt down to the basement going to cost more now that it’s flooded? It’s hard to say.”

The cost of the Beast is estimated at $4.6 billion to the insurance industry, which will likely mean a rise in home insurance premiums for property owners. The floods may not end up adding much to the overall picture, but it is clear that the town of Fort McMurray is presenting the insurance industry with problems.

 

SOURCE: http://www.cbc.ca/news/canada/edmonton/fort-mcmurray-flooding-1.3627131

Category: News

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