Canadian Underwriter

Loss and Memory

September 23, 2013   by Paul Donald

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For decades, insurance carriers and the Insurance Bureau of Canada have advised homeowners and renters to create and maintain a detailed home inventory to help them recover in case of a disaster. Creating a home inventory is an essential part of home ownership.  It serves as a road map for a family to return to some type of normalcy,  should disaster ever strike. Following the recent high profile natural disasters in Alberta and Toronto, many policyholders found themselves at a loss when attempting to piece together the details and proof of what was damaged or destroyed. For the most part, homeowners fail to realize and plan for the fact that a detailed list of lost items is required to file an accurate insurance claim and collect fully on a policy. With the increase in severe weather events, a detailed home inventory is of even greater importance.

“Over the past 15 years, studies have indisputably shown that the frequency and severity of extreme weather events across the planet have increased,” said Blair Feltmate chair of the Climate Change Adaptation Project at the University of Waterloo. In fact, in just the past two months alone Canadians have witnessed some of the country’s most costly disasters on record. On June 20, devastating flooding hit southern Alberta and seemingly caught everyone off guard. The flooding displaced hundreds of thousands of Alberta residents and severely damaged thousands of homes. It was the worst disaster in Calgary’s history, causing an estimated 3-$5 billion in damage and creating financial hardships for thousands of residents. On July 6, a train carrying crude oil derailed in the Quebec town of LacMégantic sparking explosions and sending massive flames through the air. The fire prompted an evacuation, forcing at least 1,000 residents from their homes. The cost of insured losses is to exceed $60 million marking the worst disaster in the town’s history. And on July 8, Toronto experienced the greatest amount of rainfall in a single day ever recorded in that city’s history. A torrent of 126 millimetres of rain hit the ground, more than a whole month’s worth for an average July. The storm flooded roads, transit infrastructure and hundreds of basements. The estimated cost of the flood is expected to exceed $625 million.

These disasters impacted thousands of homeowners who now have the burden of assessing the damage, documenting their losses and submitting their insurance claims. If their insurance policy doesn’t cover the damage, they’ll need to follow the same process in order to seek aid from the provincial and federal government. If climate experts are correct, these may not be the storms of the century, but an early warning of many similar events to come.

Psychological Aid

For any policyholder, having their home damaged or destroyed by fire, water, wind or even cleaned out in a robbery is a devastating event, even with the proper policy coverage. The amount of stress and anxiety caused by the event can make it hard for policyholders to think straight. let alone take on the burden of documenting their pre-loss property from memory. Pre-loss details such as  the outside of the home,  theinside of the home, exterior and interior finishes, windows, cabinets, furniture and thousands of other assets. This is most often where the missing link to recovery exists: the home inventory.

According to figures from the Insurance Bureau of Canada, 93% of Canadians believe it’s a good idea to have an up-to-date inventory of their possessions. However, only 35% say they actually have one. While 35% say they have a home inventory, far fewer keep it up-to-date and safely stored where they can easily access and update it at any time.

This is where insurance brokers can demonstrate their value-add as well as differentiate themselves from insurance providers like the banks and the direct writers. Leading by example, top brokers should invest the time to source out the best tools for their policyholders to create their own home inventory. The fact that 93% of Canadians believe it’s a good idea to have an up-to-date inventory of their possessions means that, for the most part, they just need the right coaching and tools to make creating one fast and easy. Encircle is one such solution designed to simplify the home inventory process allowing homeowners to efficiently take and upload photos of their belongings, model and serial numbers and receipts to the cloud using their smartphone or web enabled device. The home inventory process can be completed in about an hour for the average home. It then becomes a resource the broker can use to properly assess the various needs and risks of the policyholder over the lifetime of their relationship.

Creating a detailed home inventory is critically important, especially for high net-worth clients, as they have significantly more at risk not to mention government aid is restricted to low and middle income families and primary residences only. Additionally high net worth individuals tend to have more expensive assets and therefore need proper documentation in order to recoup fair value for them.

All the Details

Take, for example, Robert Filiatrault. Filiatrault’s world was turned upside down by a home fire on July 15, 2011. His day started off as any other day but upon returning home he found the second floor of his home up in flames. Fortunately, nobody was inside at the time, but his home and almost everything in it was destroyed, causing nearly $3 million in damage. Not having been through a disastrous situation like this before, Filiatrault had assumed all he needed was the right insurance coverage—but that proved to be wrong. With the weight of the disaster on his shoulders, he now had the added burden of documenting everything he had lost in the fire from memory.

Insurance adjusters sifted through the damage to create a loss report, but it fell far short of the actual value of what was destroyed. That meant that Filiatrault and his family had to spend months racking their memory to come up with a list of the thousands of items lost in the fire. As they remembered items lost they would then need to comb through credit card records and call retailers in order to come up with the purchase details. All of this additional work heaped undue stress on the family, significantly lengthened the recovery process and still did not result in a full payout. Had Filiatrault’s insurance broker spent the time with him to put a home inventory in place, he would have been spared an incredible amount of pressure, months of work and could have given Filiatrault a greater chance of recouping all that he had lost.

Insurance brokers are in an ideal position to help policyholders prepare for and recover from a disaster. In order to help the more than 65% of Canadians that do not have a home inventory, a coordinated effort needs to be taken by the broker community along with the right technology partnerships. Using tools like these where brokers can take advantage of white labelling options will clearly set brokers apart in the minds of policyholders.

Paul Donald is the founder and president of Encircle Inc.He can be reached at


Copyright 2013 Rogers Publishing Ltd. This article first appeared in the August 2013 edition of Canadian Insurance Top Broker magazine.

This story was originally published by Canadian Insurance Top Broker.