Condo owner refused home insurance because of state of emergency

Published: May 29, 2019

Updated: June 30, 2019

Author: Luke Jones

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Canadian insurance companies have been offering flood insurance coverage since 2015, but access to that coverage depends on many factors as flood risk grow. One condo owner found she was unable to purchase flood insurance because her home is located in a region that has recently been declared a state of emergency.

Pat St. George and Inna Nei bought two condos in different locations in Ottawa after separating and selling their home. St. George was able to renew his home insurance policy and transfer it from the previous property to his new condo. However, Nei was unable to do the same and was denied home insurance coverage.

Both had been with Aviva Canada for six years. The company says a state of emergency in Ottawa stopped it from being able to provide insurance policies in the area. Ottawa declared a state of emergency in the area Nei lives on April 25 following heavy overland flooding and sewer backup.

It is worth noting, while St. George was able to renew his home insurance policy, Aviva Canada cancelled the water protection benefit because of the state of emergency.

“I can understand why they wouldn’t want to sign policies on flood-affected properties, but to paint the whole city or whole region as non-insurable is ludicrous,” St. George told CBC News in an interview.

On the surface, this may seem an unreasonable move by Aviva Canada, but the company and industry experts say it was a legitimate decision.

“Like most insurers, Aviva Canada does not sell new home or automobile policies located in an area that is under a flood alert or flood evacuation order,” the insurer said in a written statement.

The Insurance Bureau of Canada (IBC) said insurance companies are forced to make hard decisions during emergency events.

“Insurance companies are not in the position to expand during states of emergencies and take on more risk,” said IBC director of consumer and industry relations Pete Karageorgos.

“It does seem unfair [but] you’ve got conflicting interests, and that’s where the challenge is in taking on new policies,” he said.