Does B.C. flood program clash with flood insurance?

Published: May 29, 2018

Updated: July 24, 2018

Author: Luke Jones

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Floods are yet again a hot insurance topic with several events around Canada this spring. British Columbia is no different, where recent floods in Grand Forks and other regions have raised questions. Typically questions like what does an overland flood policy actually cover and does the government led Disaster Financial Assistance (DFA) program disrupt coverage?

The answer to the questions is something brokers in B.C. need to come accustomed with to relay accurate information to consumers. Emergency Management BC (EMBC) wrote an email to confirm how DFA works alongside flood coverage:

“If a flooding disaster occurs and DFA is authorized for a disaster event, an applicant who could reasonably and readily have purchased overland flood insurance would NOT be eligible for DFA.”

Even this explanation may be misinterpreted. However, EMBC points out “reasonably” available coverage is not equal to affordable and “readily” available coverage means a consumer could purchase flood insurance from an agent or broker.

“EMBC does not consider affordability when determining if insurance was reasonably and readily available,” the ministry adds. “What is important is that the price of the insurance was reasonable considering the risk.”

EMBC says that “insurance companies do not offer flood insurance in high-risk locations because the premiums would be prohibitively expensive. Under EMBC’s existing criteria, someone in a high-risk area who could not get flood coverage could be eligible for DFA, provided they met the other eligibility criteria.”

The body also says it works with the Insurance Bureau of Canada (IBC) to know whether flood coverage is available in areas where DFA is authorized. “To date, flood insurance has been available in every community except for specific high-risk areas,” the provincial ministry reported.