Restoring value

When residential properties are damaged by water, most losses can be repaired if they are dealt with quickly enough. That said, things like wood paneling, fibreboard and other man-made products are more vulnerable to water damage than natural materials, some restoration contractors say.

“There really aren’t many losses that are not repairable,” Michael Flatt, co-founder and chief executive officer of First General Services, says of residential water damage claims. “The only time you wouldn’t want to repair something is when the cost of repairing it is more than replacing it.”

In the 30 years that Flatt has been in the property restoration business, he estimates that fewer than 1% of residential property claims are total losses.

Natural products – such as stone, tile and hardwood flooring – “are a lot more resistant and resilient” to water damage, says Sean Hobson, senior vice-president of sales at FirstOnSite Restoration. “Man-made products are a lot less,” Hobson notes, adding that man-made products which are not as resistant to water damage include paneling, laminate flooring, underlay and medium-density fibreboard (MDF).

“It is extremely heavy, but once it gets wet, it swells up like sponge,” Hobson says of MDF – which, essentially, is manufactured by gluing together small particles of wood. “Often times, if you can’t get to it quickly enough, it has to be replaced. But most times, if we get to stuff fast enough, we can restore it.”

Of course, there are exceptions. Consider what happened last June in Alberta, after flooding caused what Property Claim Services Canada estimates will be the most expensive natural disaster in Canadian history – at $1.7 billion – when measured by insured property losses.

“You get total losses from things such as, in Calgary, overland flooding,” Hobson says, reporting that total losses in overland flooding can occur when there is hydrostatic pressure around a foundation or when the water level gets so high that it affects more than one floor.

“If you throw in the conditions we had in Alberta – the mud and eight feet of water with sand and silt in it – you’re pretty much ripping and tearing everything out,” says Jeff Hall, regional manager for Eastern Canada at On Side Restoration Services. “Even electrical and mechanical systems are gone, at that point,” Hall says.

In Alberta, brokers from Western Financial Group spent a lot of time discussing policy wordings – such as the definition of a two-foot and four-foot waterline – with policyholders, says Teresa Bristow, the brokerage’s executive vice president.

Bristow suggests, however, that brokers also need to speak with policyholders before a catastrophe. “Having those discussions with our customers in advance of the claim – so that they understand the level of coverage they have, what is excluded and what is restricted – is very important.”

It is also important to move quickly to a property with water damage because that can make the difference between a repairable and a total loss, restoration contractors suggest.

“Speed solves all problems,” Flatt says. “If you get your policyholders to report a claim promptly, especially if it’s water, there should be nothing preventing you from saving the home. If you get to the home quickly and you find a lot of issues, that will tell you that something has been happening for some time and there’s going to be an issue with coverage,” he adds.

MOULD COUNTER

As one example, Flatt points out that if a restoration contractor responds to a water damage call the same day and finds a lot of mould, “that would imply that something has happened before, because mould doesn’t grow that quickly.”

Mould will usually start to grow after about 48 hours, “especially if there is little to no movement of that water,” says Hobson. “Typically, the first few hours are the most critical time. If it happens to be clean water, and it’s sitting for 48 hours, it’s starting to draw up the dirt, the sediments of the room it’s sitting in. It could be from the furniture, it could be from the concrete, it could be from the carpet. Within a very short time frame – 24 hours or less – it starts to switch over to that dirty water appearance.”

A build-up of mould could mean the difference between a repairable loss and a total loss.

“If mould gets into all these nooks and crannies and cavities because water sits in the home for a period of time, sometimes it’s more effective to tear the house down than to save it,” Flatt says.

For appliances, Hobson notes, these can normally be repaired, “as long as people don’t turn them on when they are sitting in the water.”

Flatt says that First General Services aims to get workers to water damage claims within two hours if emergency services are required. “If it’s a conventional claim where you don’t need any emergency services, we’re going to aim for within the day,” he says.

Brokers, for their part, can advise clients as to whether or not a claim would be covered and what the deductibles are, Flatt says. Brokers can also make recommendations to policyholders on what they can do to prevent water damage before an incident occurs, adds Greg Robertson, vice-president and commercial producer with R. Robertson Insurance Brokers Ltd. in Toronto.

“Installing sump back-up batteries,” is one example, Robertson notes. Extending the downspouts on driveways and backyards, getting the water away from the house, checking on the basement frequently, making sure to clean out eavestroughs to prevent water from pouring over the sides, and checking the grading around property are all things that can be done, he advises.

One of the biggest incidents that Robertson Insurance Brokers dealt with in the Toronto area was the aftermath of the July 8 deluge. Published reports indicate that 126 millimetres of rain fell at Toronto Pearson International Airport that day, while Environment Canada records suggest the normal rainfall for the entire month of July is 74.4 mm.

PCS Canada’s preliminary estimate of insured property losses from the rain event is $850 million – greater than the 2011 wildfire in Slave Lake, Alberta and the August 2005 rainstorm in Toronto.

“As these storms continue to get more and more sudden and violent, this is going to continue,” Robertson says of exposure to water. “As long as basements move away from rumpus rooms of the ’60s and ’70s – where you had inexpensive wall boarding and inexpensive carpet and inexpensive furniture – to these basements that are starting at $30,000 and going up to $100,000, these are the changes that are causing this rapid change in the insurance industry,” he adds.