Homeowners irate over lack of insurance coverage
With insurance policy renewals coming in over the past year, some local homeowners are learning their coverage — due to flooding claims — is no longer being provided, is being capped below replacement values or excludes sewer backups.
Two massive storms in 2016 and 2017 — swamping sections of Windsor and Tecumseh — flooded hundreds of homes, causing damages that saw the insurance industry pay out claims totalling $300 million.
Some of those insurance companies have opted out of covering customers at policy renewal time or have offered only limited coverage when it comes to flooding. At times, customer complaints have fallen to municipal politicians who also are upset because some insurance companies are blaming them for not doing enough to address sewer-infrastructure inefficiencies.
Tecumseh Coun. Andrew Dowie said he has spoken with officials from the Insurance Bureau of Canada to address the actions of insurance companies.
“We are not alone in this — it’s a national issue,” he said. “But we all are at the mercy of insurance companies.
“When people are up for renewal, if you can get coverage (for flooding), it’s only up to a certain dollar amount. The limit is dramatically less than what you need in replacing your basement.” The challenge for people in Tecumseh has been “individual companies making statements not based in fact” about the town’s infrastructure, Dowie said.
“We had two 100-year storms,” he said. “It’s not as if the town can control the weather. Companies are making statements that have no basis in fact.”
In recent years, Tecumseh has made efforts to address sewer capacity, but no system was capable of handling the storms experienced in the local municipality, Dowie said. Insurance companies are simply making decisions on Windsor-area customers “based on their business,” said Pete Karageorgos, director of consumer and industry relations for the national insurance bureau, which represents the industry. “Insurance is a competitive business and they are taking steps to handle the risks they are seeing,” he said. “In this case, it’s frequency. Windsor and Tecumseh experienced two large-scale rain events in 11 months. In some cases, a homeowner just finished restoring their basement and got hit again.” Some insurance companies have chosen to pull out of the Windsor market, he said.
“But there are many insurance companies still in the market,” Karageorgos said. “It no doubt takes more work and effort for homeowners to shop around, but there are still companies to buy insurance from.”
He said what companies will be looking for is whether homeowners have done their part to improve the odds against another claim for flood damage — installing backwater valve, sump pumps or disconnecting downspouts. “Insurance companies will look at what you can do inside of your home to limit water damage,” Karageorgos said. “They are the ones paying to rebuild the basements. They are not designed to be a maintenance program, but cover what is sudden and accidental. “Lowering your at-risk profile and what you have done to limit future events does get taken into account by insurance companies.” Dowie indicated some of the calls he has received are from residents in Tecumseh who feel cheated after receiving payments on their insurance claim. He has encouraged some to contact the Financial Services Commission of Ontario to file a complaint. For the Insurance Bureau of Canada, residents can call 1-844227-5422 or visit the website at www.ibc.ca where there is a customer question section on the mainpage.