Lessons from Airdrie

When a sudden and furious hail storm pelted Airdrie, Alberta in early August, windshields were smashed and significant damage was caused to homes and vehicles. Who could have guessed that more hail would strike shortly after the first storm?

After the storms, images of the damage had been posted online and insurance companies began dealing with a mass of damage claims (some of the hail was as large as a tennis ball). The events were labeled “catastrophic,” by the Insurance Bureau of Canada (IBC), as the estimated damage cost exceeded $25 million.

Most “notice of loss” calls made to Western Financial Group’s after-hours claims line were from clients reporting damaged personal property. About 60% of these calls reported damage to residential property while the other 40% were for automobile claims.

Although hail storms (caused when rain is lifted into the atmosphere during a thunderstorm and cooled below freezing, turning it into ice) are expected from June through September in Alberta, that first storm to hit Airdrie in early August was unique. Instead of passing through, the mass of ice and wind hung over Airdrie for approximately 15 minutes, which caused significantly more damage.

Bill Adams, vice president Western and Pacific of Insurance Bureau of Canada (IBC), recently stated that the severity and frequency of harsh weather is on the rise across Canada. Indeed, the last two summers have brought record levels of hail damage to Alberta alone, notes Agriculture and Rural Development Alberta.

But regardless of where ones lives, everyone can be better prepared to protect their property from this type of damage, as the frequency of these storms increases.

UNDERSTANDING COVERAGE

In a recent Western Financial Group survey, 70% of the Canadians asked said insurance protection against bad weather is important, yet 19% said they do not know the extent of their current plan. Multi-peril insurance and more comprehensive plans will look after things that are not typically covered, such as hail damage to a car.

COVERAGE LIMITATIONS FOR HAIL DAMAGE ARE CHANGING

Many companies have made changes to coverage of homes and vehicles. For example, carriers may take the age of the roof and depreciation into account and pay a cash value to repair roof damage instead of full replacement coverage. It is also worth noting that granular loss to a roof is not usually covered, because that type of damage does not reduce the life expectancy of a roof. Moreover, policies usually have a two-year statute of limitations on hail damage claims, and landscaping is likely not covered.

Many vehicles are also written off as a result of hail storms because the repair costs, in some cases, can be greater than the value of the vehicle.

TYPES OF MATERIALS AFFECT CLAIMS

Western Financial Group received several calls about mobile homes with aluminum siding that got dented during the Airdrie storm. Aluminum is weaker than other materials commonly used in siding and is easily damaged. It is often not covered in a hail claim because it would actually have to be punctured in order to be covered.

Many policyholders are unaware of the limitations on materials used and types of siding on mobile homes and outbuildings on farms. It is important that customers understand any distinctions in their policies and consider asking a reputable contractor to advise on the most suitable materials for the region.

ENCOURAGE COMPREHENSIVE COVERAGE

To make insurance more affordable, many Canadians slim down insurance on a motorcycle, boat or an all-terrain vehicle (quad) to just liability coverage. However, many mistakenly think that liability insurance covers them for incidents such as hail damage. A good broker will advise on keeping comprehensive coverage for all vehicles to cover for theft, fire, vandalism, damage caused by animals or natural disasters and falling objects when parked.

INDOOR PARKING IS NOT JUST FOR WINTER

There is little time to respond after a severe weather warning, as hail storms happen suddenly. Underground parking is a necessity for many people during winter. Clients with access to either underground parking or to a garage year-round, should be advised to park indoors. This is especially true when going on vacation in the summer, since there is a good chance a storm may occur while the client is away.

BRING PATIO FURNITURE INDOORS

Umbrellas are frequently picked up by wind, and are often blown as far as five homes down a cul-de-sac. Clients who are home and know a storm is coming are advised to bring patio furniture indoors and take chairs down. Those without fences whose outdoor furniture blows away could be liable for damage caused to neighbouring properties. This step can also help mitigate risk to a policyholder’s own property.

REPORT DAMAGE IMMEDIATELY (BEFORE A BACKLOG)

After a major event, there will be a significant number of claims. The longer a property owner waits to report damage, the longer it may be to get a contractor to inspect it. Two years ago in Calgary, there were so many claims after a summer hail storm (which only lasted 10 minutes) that many people had to wait until winter to have damage repaired.

DOCUMENT IT

Because there can be processing delays following a natural disaster due to the volume of claims, policyholders should document damage by taking pictures.Keeping receipts and other documentation related to property for at least two years is another good tip. For example, a client who has had recent repair work done on a roof and keeps all receipts and documentation can help reduce the risk of a carrier or adjuster questioning the age or state of the roof before it was damaged.

BEWARE OF OPPORTUNISTS

Opportunists strike after a major event, often disguised as contractors offering to do repairs. Because people can be desperate to find repair vendors in these situations, they may forget to do their due diligence in vetting contractors. Brokers can be a great resource to help customers avoid fraud by reminding them to properly select a contractor after a major event.

The best advice is to encourage people to communicate with their agent or broker – before damage has been done – in order to understand their coverage.