March 1, 2004 by Canadian Underwriter
Insurance PR Slipped
November 1, 1954
Hurricane Hazel swept through Toronto and district October 15-16 causing severe loss of life and tremendous property damage. At the time of writing there are 73 known dead and, in addition, 12 missing, believed drowned. Not even a “guestimate” of property damage can be given at this time but it is safe to say that the dollar cost will run into tens of millions of dollars.
The afflicted area took in the whole Humber River valley, the upper reaches of the Don, the Credit and Etobicoke rivers, all west of Toronto and Highland Creek, on the east. Extremely heavy damage was sustained in Metropolitan Toronto, Woodbridge and the 7,000 acre Holland Marsh. Weston, Brampton, Newmarket and Listowel were also affected. The heaviest loss occurred in the Humber Valley from Lawrence Avenue to Eglinton Avenue, and it was in the area that most of the lives were lost.
Following a normal two-inch rainfall, Hazel brought a torrential downpour of 7.2 inches in less than 24 hours, accompanied by heavy wind. The rivers became rampaging waterways that, in the Humber, rose to thirty-foot levels, smashing frame and brick houses alike to debris and taking the lives of men, women and children. All bridges to the west of Toronto and the approaches thereto were washed out. Roads were destroyed.
The storm had its beginning in the Windward Islands, some 1600 miles to the south-east of Miami, Florida. It reached the South Carolina coast at velocities reported as high as 132 miles per hour. The path of the storm gradually veered inland, finally hitting the Buffalo, N.Y., area, thence across Lake Ontario into Canada, striking the cities of Hamilton, Toronto, Barrie, then northward through North Bay, finally dissipating itself in the Hudson Bay and far north.
Factors contributing to the heavy loss of life and property in the Toronto area are given as: lack of control dams, building on the flood plains, lack of proper warning system, complacency of many of the people living in the worst affected areas, and debris in the river. Now that the catastrophe has been experienced, remedial measures are afoot aimed at preventing a repeat occurrence.
Relief for the homeless and suffering was prompt… A relief fund was opened for public subscription. $10 millions are sought for this fund. All this and much more will be needed to replace the losses of homeowners, merchants and manufacturers in the district. The lives lost, the pain and suffering of the survivors can never be compensated for.
The insured loss will be heavy but, at that, only a small part of the total loss-cost of this catastrophe. The great bulk of the flood losses are not covered by insurance. Flood damage to personal property covered under a Personal Property Floater policy will be paid but it is not thought that many of the property-owners carried this form of insurance. Fire policies with supplementary coverages cover water escape and windstorm but not flood losses. Many automobiles were lost in the flood and, if the owners carried the new comprehensive automobile insurance – most probably did – their claims will be paid. On thing to be confidently expected under the circumstances is that settlement of border-line cases will be treated generously by companies.
The promptness with which loss adjustment facilities were set up can be judged from the fact that the first claim (automobile) was paid by 9 a.m. on Saturday, October 16. During the previous night all adjusters in the Toronto area were alerted and, under the direction of the Underwriters’ Adjustment Bureau, started work within a few hours…
The prompt reaction to the needs of the hour by the adjusters is greatly to their credit and should have been most helpful to good public relations. They were handicapped, however, by lack of direction from superior authority with unfortunate effect, as it will be seen, upon public opinion of the insurance business.
When events of the kind occur, it is essential that the insurance business speak to the public with one voice. That voice should speak promptly and with authority. If that is done, public fears are allayed, agents can service their clients, adjusters can settle claims with alacrity. The result of it all is public understanding and public goodwill. As we write, one week after Hazel struck, that voice has not spoken…
On Monday, October 18, there was a meeting to discuss legal liability and settlements. An uninvited newspaper reporter slipped into the meeting unnoticed. Next day a streamer heading on the front page of the Toronto Telegram announced “Not a Nickel of Insurance for Flood Damage”. This heading and the story, on an inside page, gave an already harried public a heavy jolt. Thousands got the impression that no insurance claims of any kind would be paid. Agents were inundated with calls and could give no satisfactory answers. Even the adjusters in the field, four and five days after the flood, were giving evasive answers.
What a different story there would have been to tell had a clear forthright story been issued promptly, telling assureds what they could expect…