Nova Scotia wildfires – what’s the insurance claims picture?

Nova Scotia wildfires – what’s the insurance claims picture? | Insurance Business Canada

Catastrophe & Flood

Nova Scotia wildfires – what’s the insurance claims picture?

Atlantic Canada needs to brace for more uncharacteristic weather, says IBC VP

Catastrophe & Flood

By
David Saric

In the aftermath of the Nova Scotia wildfires, the varying degrees of loss showcase no region is safe from climate irregularities and the need for effective mitigation measures.

“This is unlike anything Nova Scotia has experienced before,” said Amanda Dean (pictured), the Insurance Bureau of Canada’s (IBC) vice-president, Atlantic.

“In my research, I haven’t found three catastrophic wildfires that occurred simultaneously, which points to the fact that we must be well prepared for events of this nature in the face of climate change.”

Dean spoke with Insurance Business to shed light on the varying degree of claims that have materialized since the wildfires and how a broker’s knowledge and inquisitive nature can help safeguard clients from future losses.

An opportune environment for reckless wildfires

Just last September, Nova Scotia was grappling with Hurricane Fiona, which caused nearly $800 million in insured damages across the Maritime provinces, according to IBC findings.

“In the aftermath of Fiona, one can assume that the downed brush and trees helped contribute to the fertile conditions for these wildfires,” Dean said.

Certainly, a much drier spring due to a rainwater deficit, as well as old forests that exist within the region, created the perfect condition for this type of event to take off very quickly.

When claims began to pour in as the wildfires recklessly scorched both wooded and residential areas, insurers noticed varying degrees of destruction.

“Some folks whose homes are still standing, are filing claims for additional living expenses, smoke damage, automobiles being completely burned, in addition to food spoilage,” Dean said.

Property damage has been widely reported, in some cases 30-50% of the siding on the exterior of homes has melted off. In addition, there are those who have seen their homes completely burnt to the ground and are now accessing every section of their homeowner’s policy to help remediate such a devastating loss.

The regions that have been most affected by the wildfires — namely Barrington and Sherburne —are primarily reliant on oil heat, and insurers are also being notified of an increase in oil spills within the home.

“As people are making their way back into their homes and discovering that their oil tanks are still standing, many have begun to report leakage or that the fuel has pooled,” Dean said. “We recommend that those residents report a spill immediately to their insurer, because coverage can vary in those situations. If it is an insured spill, a carrier will report it to the Department of Environment on behalf of the homeowner.”

How brokers can be of service in the aftermath of a wildfire

For Canadians in the Atlantic provinces, wildfires are a particularly new phenomena to deal with, especially considering the particularly wet climate that is characteristic of the region.

For policyholders who have never had to evacuate a commercial or personal property due to a catastrophic environmental event, there may be many questions on how to navigate this testing experience.

Brokers have a role to play – they can provide both broad and highly specific policy information, while also ensuring that they are aware of any recent physical property upgrades or high value item acquisitions.

“Brokers are adept at having very detailed conversations regarding the particularities of policies while also making sure that certain coverages may need to be updated due to weather phenomena or other factors,” Dean said.

“Whether it’s explaining the additional living expense section in a policy, informing an insurer of any recent renovations, or whether a client may have purchased artwork or jewellery that needs to be endorsed, a broker should thoroughly assess a variety of variables to be able to offer actionable insight.”

However, in order to be better prepared for future instances of natural catastrophes, insurers, the government and policyholders must band together to thwart the growing severity of climate change-related losses, Dean stated.

“Politicians can help write new bills for more efficient handling of catastrophes and to better safeguard a region through necessary upgrades or increased protection to vulnerable ecosystems,” Dean said.

“Additionally, insurers and brokers have resources and ample risk management/prevention tools at their disposal, and can communicate that information to clients so that these precautionary steps become common logic after recovering from a loss.”

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