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Insurance: What the Calgary Floods Taught Us

Blog by Sara Kalke | June 27th, 2013

The Calgary floods have been absolutely devastating to watch.  The impacts on homeowners' lives who were affected will be lasting, especially if their precious memories were lost, like my family's were in the 2007 floods in Edmonton.  All of my family's photo albums were destroyed except for my sister and my baby books which my mom mysteriously placed on her mattress that morning which thankfully floated. 

I remember the horrible feeling when I opened the door to my parents basement to see 5 feet of water, and our big reclining chair floating around the corner.  It was awful.  The clean-up was serious too... with so many people flooded, it was time to dig in and "get 'er done" Alberta style, which for us meant my cousin and I draining the water, digging and carrying out about 100 pails of silt, then removing drywall, carpet, subfloor, bathrooms, etc. in what felt like an endless, humid, mouldy pit.  I was very thankful to have my cousin who is a very strong guy, as if you've seen me from the photos, I'm not exactly a hulk! I am sure many in Calgary are going through a similar experience now and my heart goes out to them.

Anyway, the Calgary floods are a great reminder of so many things.  Not to diminish the personal lossess, but it's worth mentioning the insurance and real estate side of things.  This is a really good article that I read by REIN regarding the impact the flood will have on Alberta real estate:  Click HERE for the full article.  The points I'd like to hilite here are what they say on insurance:

"#4 Renewed Focus on Insurance Coverage

This natural disaster will hopefully put a new focus on the importance of proper home insurance, for both property owners as well as renters. And although a direct flood as we have seen here is not often covered in policies, many assumed that it was. In fact many who do have insurance really don’t understand what is covered and what is not. This flood will really bring to the forefront that no two policies are alike and price should never be the only determining factor for insurance choice.

As the waters recede and the repairs begin, we encourage all homeowners and renters to review their policies in detail… even if you weren’t affected by this round of flooding. Find out what is real in your coverage (without assuming) so you can make informed decision on whether to keep coverage the same or find something more comprehensive or competitive.

For instance, right now there will be landlords who will not be collecting rent for a number of months as their suites will be uninhabitable. With some insurance you can get ‘rental replacement’ coverage meaning the insurance company pays you equivalent rent; with many policies this does not exist. With some policies you are only covered for a 30 day vacancy, while others this is extended for months. Some have sewer back-up coverage, while many do not. These are just a few of the important differences that will become very apparent in the coming weeks.

Oh yes, disasters like this don’t go unnoticed, so please be prepared for the following potentialities:

a. Overall Insurance Premiums to increase to cover the costs of this disaster
b. YOUR insurance premiums to increase if you are making a large claim
c. Potential of some insurance companies no longer wishing to provide coverage in flood-potential zones (or if they do, making the premiums very expensive)."


Food for thought and hopefully action.

Stay safe!