Canadian Underwriter
Feature

Cleaning Up


August 12, 2020   by Greg Meckbach, Associate Editor


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The record-setting hail storm that hit Alberta June 13 has spawned tens of thousands of claims, with many consumers and businesses likely waiting until next year to see their properties repaired.

As of mid-July, more than 70,000 claims have been reported to insurers, Rob De Pruis, IBC’s director of consumer and industry relations, western, said in an interview with Canadian Underwriter. That includes claims in home, auto and commercial lines.

Catastrophe Indices and Quantification Inc. (CatIQ) estimates the storm will cost the industry nearly $1.2 billion, thanks in part to tennis ball-sized hail at one point during the storm.

As a result, there is widespread damage to roofs, siding and anything else exposed, Walter Waugh, vice president of operations for Western Canada at Crawford & Company (Canada) Inc., told Canadian Underwriter.

Shortly after the storm, Crawford heard that in some instances, roof repairs and siding replacement likely would not be completed in 2020. So the top priority is making temporary repairs — such as putting tarps on roofs — to make structures watertight, said Waugh.

IBC is hearing similar stories. “We have heard from a few contractors that they are very busy,” De Pruis said. “They are really focusing on ensuring that temporary repairs are completed to make sure the homes are watertight. Some contractors are starting to book in to next year already just because of the volume of repairs that are needed in some of these neighbourhoods.”

By insured loss, the storm ranks fourth — behind the 2016 wildfire, 1998 ice storm and 2013 southern Alberta floods — on the list of Canada’s costliest natural disasters. It is the costliest hail storm in the country’s history. Neighbouring communities affected include Airdrie, to the north of Calgary, which suffered nearly $600 million in insured losses in 2014 from a hailstorm.

“At the epicentre of the damage area, in northeast Calgary, we are hearing reports of damage to roofs, siding, eavestroughs and broken windows with repairs costing tens of thousands of dollars per home,” De Pruis said.

“A lot of these clients got hit with the trifecta,” Barry Haggis, president-elect of the Insurance Brokers Association of Alberta said of the storm. “You’ve got hail coming from above destroying siding and roofs, and then we had sewer backups and overland flood coming from below because the storm sewers got overwhelmed.”

Crawford is tracking damage to commercial and condominium structures that will cost between $2 million and $3 million to repair, Waugh said. There could be dozens or even hundreds of commercial clients affected.

Quite often in a thunderstorm, hail drops due to gravity, said Glenn McGillivray, managing director of the Institute for Catastrophic Loss Reduction. “In this case, we had downbursts. It acts like a sandblasting effect.”

Of the 70,000 claims, IBC has heard there was a fairly even split between home and auto claims, with a smaller percentage of commercial (that includes damage to condo corporations).

Based on the ranking of the Calgary hailstorm, the July 8, 2013 thunderstorm that hit the greater Toronto area now slips to fifth place on the list of Canada’s all-time costliest insured catastrophe losses. The Ontario storm cost the industry about $1 billion, mainly from sewer backup.

Other expensive weather catastrophes, as reported earlier by A.M. Best Company Inc., include (All figures from A.M. Best are adjusted for inflation):

  •  At $784 million, an August 2005 thunderstorm in the Toronto area that caused the bridge carrying Finch Avenue over Black Creek to collapse;
  •  At $680 million, the May 4, 2018 wind storm affecting southern Ontario.

 

 

Feature Image: The Canadian Press/Jeff McIntosh

 


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