Canadian Underwriter

A 15% cut in home insurance premium? There’s (almost) an app for that..

March 1, 2018   by Greg Meckbach

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A mobile app designed to help homeowners get a discount on insurance premiums by reducing flood risk should be on the market within a year, an Technology conference speaker said Tuesday.

The Intact Centre on Climate Adaptation at the University of Waterloo is helping to develop the app, which would ask homeowners “questions along the lines of, ‘Is the downspout from your eavestrough disconnected from the weeping tile system?’” Blair Feltmate, head of the Intact Centre, said Tuesday during a presentation at ICTC in Toronto.

Blair Feltmate, PhD, Associate Professor, Faculty of Environment and Chair, Climate Change Adaptation Project (Canada), University of Waterloo

Blair Feltmate, PhD, Associate Professor, Faculty of Environment and Chair, Climate Change Adaptation Project (Canada), University of Waterloo

“The way we envision it is, this will be a downloadable app that any P&C company can subscribe to,” Feltmate said, adding the Insurance Bureau of Canada is collaborating on the development. It “will be rolled out in less than a year from now,” Feltmate said. The idea is to have a homeowner take 20 to 25 minutes to answer questions on the app, submit the answers to their insurance provider, get a response and possibly get a reduction in premium, he said.

The questions are based on research on “what is typically wrong with houses that causes basement flooding,” he said. “The average cost of a flooded basement in Canada right now is about $43,000,” he said. “The biggest threat to the housing market in Canada is not a 25 basis-point rise in interest rates. It’s flooding basements, by far. The reason you don’t hear about it so much is because people don’t run around saying, ‘Oh, by the way, my house is no longer insurable for basement flooding.’”

The app may ask a homeowner, for example, whether the home’s sump pump has backup electrical power. That’s in case a storm responsible for flooding also knocks out a home’s power, said Feltmate. He could not predict how much Canada’s property and casualty insurers will collectively save in claims costs by consumers taking some of the steps suggested on the app, but Feltmate is confident it will be a “big number.”

In addition to disconnecting downspouts from weeping tile, there are about a dozen things homeowners can do to reduce basement flood risk, such as contouring around the house to direct water away from foundation. Many basement flood risk mitigation measures could “be put in place by the average homeowner on a Saturday and maybe a Sunday morning, with virtually no special expertise,” he said. Others, such as backwater valve installation, require experts.

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