Quebec floods cause claims surge, 70,000 filed after torrential rainstorm

Insurers received approximately 70,000 claims after Tropical Storm Debby flooded southern Quebec in August, the Insurance Bureau of Canada (Quebec) reports. 

That’s more than ten to seventeen times the usual volume, “and claims continue to come in,” says Line Crevier, supervisor of technical affairs at the Insurance Information Centre. “People should expect longer than usual processing times for their claim.” 

The Quebec flooding, which occurred Aug. 9, is one of four major natural catastrophes that hit Canada in less than a month’s time, IBC reported earlier this week. That includes the wildfires in Jasper, the torrential rainstorm flooding in Toronto, and the hailstorm in Calgary.  

Official loss figures for three of these Cats are yet to be released. Toronto flooding caused $940 million in insured damages, IBC reports.

Flood coverage uptake in Quebec is as follows, according to IBC Quebec public affairs supervisor, Anne Morin:

Ground water and sewers water damage endorsement uptake: 78%
Above ground water damage endorsement: 65%
Ground water, sewers and overflow of body of water endorsement uptake: 48%

Water infiltration, sewer backups, and river overflows are among the types of damages insurers can expect, IBC said in the early stages of the Quebec flood response.

How much flood claims cost 

How these 70,000 claims are split up between business lines will impact the final dollar figure for insured damages. 

The average cost for an insurer to fix a water damaged home is $43,000, according to 2018 figures by IBC. This would be higher today, when factoring in inflation. 

Roads and highways also flooded during the Quebec storm, meaning there could be repairable or total losses to vehicles.  

The average cost for a repairable vehicle claim in Canada is $5,044. That’s expected to increase to $5,500 in 2024, according to a recent Mitchell report. (And a dramatic increase in body shop labour rates is one of the reasons for these rising costs.) 

Adjusting firms are also responding to commercial losses on top of personal ones, Sedgwick’s Quebec regional vice president Gabrielle Cote said. So large commercial property losses — and possibly business interruption claims from the Quebec floods — could account for an upward drive in claims costs.  

The above figures are based on non-catastrophic pricing. That’s because when restoration firms and other post-disaster services are stretched for demand, they’re able to increase the prices of their services.  

And these consecutive disasters have created “enormous pressure” on the insurance industry and post-disaster services, IBC says. 

So, it’s possible insurers can anticipate higher costs of getting repairs and rebuilds done, post-Cat. 

“There are only so many restoration specialists. There are only so many dehumidifiers, sump pumps, and other equipment like that, that can be brought in,” says Alex Gemmiti, service manager at Mitch Insurance. “And sometimes when there’s a catastrophic loss in another area — it doesn’t even have to be local, it could be outside of the province — sometimes contractors that don’t have a lot of work will pack up and follow a wildfire or follow a rainstorm or a hailstorm. 

“They’ll be mobilized outside the region, and then a loss occurs, and it takes them awhile before they can even return to that space again. They can’t necessarily drop everything they’re doing and leave all their equipment to head home.” 

Another factor in assessing the impact of insured damages is that Quebec may pay the difference in the cost of repair work not covered by insurance, though this varies per case. Quebec Premier François Legault told disaster victims to first file claims with their private insurers for the maximum coverage provided by their insurance contracts, The Canadian Press reports.  

Morin says insurers have reallocated their internal resources to meet demand, even calling in retired employees and students to help.

“We know that insurers are reviewing their ways of proceeding following the reductions announced by the AMF last week, which allows them to bring in experts from outside Quebec and respond to claims by telephone up to an amount of $30,000.”

The costliest floods in Canada

With ongoing claims response, it will take time for a damage tally to be finalized. IBC says it takes an average of 30 to 45 days for final estimates to be ready. It’s too early to tell if the Quebec flood and Toronto floods are comparable in any way. 

In Canada, the costliest flood on record is Calgary in 2013. That flood cost insurers an estimated $1.8 billion in insured damages and about $5 billion in total damages. It also was the catalyst for the industry creating residential overland flood coverage, which would affect the total claims cost from these recent flood events. 

With files from David Gambrill. 

Feature image by iStock.com/vinhdav