Don’t Wait Until It’s Too Late: The Need For Proper Insurance Coverage

Published May 15, 2017 by Real Estate Leads

Home Insurance Coverage Abstract Illustration. Large Blue Umbrella Covering Single Family Home. 3D Illustration Isolated on White.

Recent events in the Eastern part of Canada are a reminder that shifting global weather patterns and trends – likely prompted by global warming – are seemingly making extreme weather events a much more common seasonal risk for certain communities.

Here at Real Estate Leads, we aim to provide ways for realtors to increase their home seller and home buyer leads, but we also realize the value in having realtors be able to appraise their clients of wise choices when it comes to home ownership. In light of the aforementioned events, and others like the increase in wildfires in the west every summer, it’s important to remind clients of the need for home insurance that matches the specific risks they face based on the regional location of their home.

With regards to these floods, it appears that the majority of Canadian homeowners aren’t insured for flooding and could be left on the hook for at least part of the bill after heavy rains in several areas across the country, experts say.

A representative for the Insurance Bureau of Canada estimates that only 10 to 15 per cent of Canadians have overland flood insurance

. This type of add-on insurance policy is typically not included in the clauses of standard home insurance packages in Canada, and most notably it wasn’t offered prior to 2013, the last time severe flooding affected certain communities in Canada.

The reason for this was that it wasn’t until that time that flood risk maps were developed for the whole country. Keep in mind that the insurance industry needs to be able to quantify the risks so they can assess which premiums should be charged to which people. A risk-per-region determination was required before any type of coverage guidelines could be established, and that took time.

And so, many homeowners with policies negotiated years ago may be insufficiently covered after heavy rains left several communities in Quebec and Ontario struggling with rising floodwaters over the weekend and parts of New Brunswick and British Columbia also faced flooding.

Delayed Roll-Out Inevitable, But Unfortunate

Insurers began working on the overland flood insurance add-on as soon as they could following the establishment of those maps, but naturally it took time to roll the policies out. The add-on has been available for most policies since late 2015, but – as is so often the case – policy owners are often lax about revisiting their policies once they’ve obtained them.

It’s important to do this, and particularly so given the fact that climate change is making calamitous acts of nature much more common across North America. It’s highly advisable to appraise new homeowners you’ve worked with – and ones you’ve similarly worked with in the past and keep in touch with – that they should be having a look at the coverage provided in their policies at least once every year to make reassessments as necessary.

Then there is the fact that most Canadians only interact with their insurance broker when the time comes to renew their policy. Most people are not even aware that overland flood insurance is available, unless they have been directly in a conversation with their broker or agent when renewing over the past year.

Further, homeowners should be adamantly reminded to NOT be expecting to be able to rely on government assistance in the event of an emergency situation, for obvious reasons given the fact that the funds available to cover such incidences are at an all-time low. In addition, government assistance is often designed to compensate homeowners for core essentials only.

Out Of The Know

A study last year that surveyed 2,300 Canadians who live in high-risk flood areas found that the a 70% majority of those polled reported having not been contacted by an insurance company about newly available overland flood insurance. It also revealed confusion on the part of respondents about what is – and isn’t – covered by their insurance policies. The majority of those surveyed thought overland flooding was already covered under their insurance policies by default.

As a realtor, there is a real opportunity here to both further the connection and reputability you have with your clients, as well as ‘do the right thing’ in making them aware of the need to be especially critical when looking at their home insurance policies.

By being a real estate professional you have an inherent level of authority regarding subject matters related to home ownership, and as such your clients are more likely to heed to your advice and or urgings regarding home insurance coverage than if they were to hear it from someone else. Take advantage of this to further your professional capacities, and enjoy being regarded so highly!

Operating your real estate business ethically and responsibly is indeed rewarding, and of course having greater numbers of listings for both buyers and sellers is fortuitous for giving you these opportunities. Sign up for Real Estate Leads here and receive qualified online-generated leads delivered to you exclusively for your protected region of Canada each month. From there, you’ll have a foot in the door and chances to do what you do best!