Most policies won’t cover costly flood damage
City sets up sessions to walk the afflicted through the process, writes Andrew Duffy.
As flood waters start to recede in Ottawa, the laborious job of cleaning and rebuilding is about to begin for hundreds of homeowners affected by the disaster.
The City of Ottawa has scheduled three information sessions Tuesday to brief affected homeowners about what to do next. Officials from the public health department, the Canadian Red Cross, the Insurance Bureau of Canada, and the Ministry of Municipal Affairs will take part in the sessions. Among other issues, the sessions will address critical questions about home insurance and disaster assistance.
Q Does home insurance cover flood damage?
A Pete Karageorgos, director of consumer and industry relations with the Insurance Bureau of Canada, said the vast majority of home insurance policies do not include flood insurance, which must be purchased as an add-on coverage. That coverage is known as overland flood insurance. Most insurance companies, he said, have only started offering it in the years since major flooding hit Toronto and Calgary in 2013. Those with overland flood insurance will be covered for damage in keeping with terms of their individual policies. Karageorgos, however, said few homeowners have taken advantage of it: “We suspect a very small percentage of the population has added it.” Only 10-15 per cent of homeowners, he estimated, are now covered by flood insurance. Those without the coverage must rely on disaster assistance.
Q What disaster assistance is available to people whose homes have been flooded?
A Ontario’s Disaster Recovery Assistance program is the principal source of help for those affected in Ottawa, and other flood zones in the province. Quebec has its own general financial assistance program for disaster victims. (Information about who qualifies in Quebec is available online or by calling 1-88-6432433.) In Ontario, the program covers the cost of a returning a home to a basic living standard after a natural disaster such as a flood, earthquake, tornado or landslide. Secondary residences and cottages are not eligible. Homeowners must make an insurance claim before submitting an application for disaster assistance.
Q How does a homeowner apply?
A Homeowners have 120 calendar days to apply for assistance after the province activates the program in an affected area. The Disaster Recovery Assistance program has already been activated in Renfrew County. Provincial officials are now studying the situation in Ottawa and other flooded communities. “The government may activate disaster assistance in other parts of the province, in addition to Renfrew County and Pembroke, as flood waters recede and flood impacts are assessed over the coming days and weeks,” said Conrad Spezowka, a spokesman for the Ministry of Municipal Affairs.
Q What kind of documentation is required?
A Homeowners must document the damage to their homes, and all related expenses. Applications must include photos of the interior and exterior, and all damaged furniture, appliances and household goods. Homeowners must retain receipts for expenses, and obtain estimates for home repairs. They must also obtain a letter from their individual insurance companies, detailing any insurance payouts and the reason that claims were not covered.
Q What kind of costs are covered by the disaster assistance program?
A The program covers “essential property,” meaning an individual’s primary residence and its key contents (or the main premises and key equipment of a small business or farm). It does not cover damage to cars, driveways, fences, jewelry, antiques, art or most electronics. The cost of emergency relocation expenses, household appliances and furniture are eligible, but are subject to caps and deductibles. (Payouts for a washing machine and dryer, for instance, are each capped at $500, a stove $700, a fridge $900 and a TV $450.) The program also covers the costs of cleanup and disposal.
Q Is there a limit on disaster assistance?
A The program finances repairs and replacement items to a “basic” level using standard building materials. The maximum paid out to any one homeowner is $250,000.