Last Fall, extreme weather conditions resulted in many families within the Algoma Region experiencing water damage in their homes and on their property. This extreme weather is now considered by the insurance industry as the new normal.

According to the Insurance Bureau of Canada, between 2006 and 2012, the amount of insured damage resulting from extreme weather grew from $158 million to $1.19 billion.

Adding to the challenges of climate change is the ability of the municipal infrastructure in Canada to handle the high volume of water created during extreme weather.

Since 2006, the insurance industry has responded in a variety of ways.

The most common approaches have been around policy wordings, special limits, higher deductibles and higher premiums.

Education about water damage prevention, as well as premium incentives for those who take measures to protect their homes against water damage, have become more common.

Going forward, the insurance industry will continue to adapt ensuring that insurance products are available that are sustainable and affordable for the long term.

How does this affect you?

The approach and weighting of the following actions will be determined by each individual insurance company. Possible actions include but are not limited to the following:

• Increased premiums;
• Decrease in water damage cover – special limits with the option to purchase higher limits, subject to underwriting approval;
• Increase in policy deductibles;
• Policyholder commitment and mitigating actions to assist in the preventative measures to protect their property;
• Introduction of individualized rating with revised underwriting guidelines, and new discounts to recognized customers who take preventative measures;
• No cover for the peril of water damage.

Going forward, the insurance industry will continue to adapt ensuring that insurance products are available that are sustainable and affordable for the long term.

This will be the number one communication topic on your personal property policy.  We will be contacting all our clients about the impact and changes to their policies.