By: Luke Jones, Published on November 15, 2017 11:47 AM, Last Update on November 15, 2017 08:48 AM
Floods in Canada continue to happen more frequently and are more severe. Insurance companies have responded with solutions to cover floods, debuting in 2015. However, gaps in the market remains and concerns about how to deliver coverage to all affected homeowners is a concern, with government intervention called for.
The Insurance Bureau of Canada says insurance providers are urging brokers to “stay on top” of the water coverage policies available and to understand the different ways carriers tackle water risk.
“It’s a complex area and it’s a rapidly-evolving area right now,” Craig Stewart, Insurance Bureau of Canada (IBC)’s vice president of federal affairs, said. “So, it’s important for brokers to stay on top of the various products that are being offered and the differences between them.”
Overland flood solutions are still relatively new, not being introduced until 2015. Before that, insurance companies were caught in a claim limbo and customers were unsure how to properly protect their properties. While coastal coverage is still unavailable, the overland flood market has since diversified.
Insurance companies urge brokers to be aware of price increases on home insurance policies when overland flood protection is added.
The IBC has not “heard anything about raising premiums,” Stewart suggested Tuesday.
“Canada is a very competitive market, so our expectation is that market pressure will keep premiums competitive,” Stewart said. “We do know that different insurers are taking different approaches with addressing the risk.’
Not all insurers follow the same model, with some assessing risk based on “deductibles and some are going fully on to risk-based pricing, which means it is going to be very expensive for high-risk properties.”
Because of the diversifying market, Stewart says brokers should shop around on a customers behalf for the best deal.