Canadian Underwriter

How emergency generators can help reduce insured losses

January 11, 2019   by Jason Contant

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Emergency generators not only temporarily provide electricity during a power outage, but can also mitigate property damage and help reduce insured losses, says a new report from the Institute for Catastrophic Loss Reduction (ICLR).

These generators can help reduced insured losses by preventing the freezing and bursting of pipes in winter, keeping sump pump systems operational during outages and by preventing business interruption claims, to name just three examples, ICLR managing director Glenn McGillivray told Canadian Underwriter Friday. Emergency generators are also useful year-round, when power supplies are disrupted from extreme wind, winter storm (including ice storms) and when supplies are disrupted for technical reasons.

The problem, McGillivray said, is that people tend to run out and buy a generator just prior to or during an emergency. “So they grab whatever is available and hope for the best,” McGillivray said. “Really, though, a fair bit of research should go into the purchase. And people should consult experts, and not just the person working down at the big box store.”

For brokers, they can highlight the upsides and downsides of emergency generators and advise clients who are interested to first do their homework. “The best time to buy a generator is when the sky is blue and everything is OK. Then you can take your time and make the right purchase,” McGillivray said.

Released Jan. 6, the report Focus on emergency generators highlights key features to consider (such as automatic start and low-oil shutoff), how to choose the right unit and installation considerations.

According to the report, Ontario had the most reported outages between 2015 and 2017 (135 in 2015, 162 in 2016 and 177 in 2017), followed by British Columbia (56 in 2015, 83 in 2016 and 83 again in 2017).

In November 2018, the Canadian Press reported that the number of storms requiring a response from BC Hydro repair crews has tripled since 2013. The number of customers affected by an outage also jumped from 323,000 in 2013 to nearly 1.2 million last year.

Earlier this week, there was reportedly a hydro pole explosion in Prince George, leaving 900 people without power. In early January, a powerful storm swept across the province, leaving flooded or snow-clogged roads in its wake.

“I think it is important to underscore that severe weather events appear to be more common, and will almost definitely worsen in the years ahead,” McGillivray said. “At the same time, our power infrastructure is in rather poor condition and getting worse as time goes by. These two things, coupled with society’s growing dependence on electricity, means that disruptions in power supplies will only become more common, longer and more disruptive and costlier.”

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2 Comments » for How emergency generators can help reduce insured losses
  1. Kathie Giles says:

    Purchased a Generac Home Standby generator with automatic switch over during power outage for this exact reasons described in this article. Unfortunately, Insurance Industry in Canada lags behind it ‘s US counterparts in providing 5% reduction on house premiums. Currently, granted 2% discount for a back up battery on Sump Pump but nothing else!! There is a need for the industry to address this issue as weather related claims due to power outages during summer & winter has increased due to climate change.
    Times are a changing & here’s hoping the Canadian Insurance industry will begin to keep up.

  2. Mavis says:

    Exactly, we were planning to install a whole house Generac for our home to prepare for possible climate/electricity emergency issues and due to the cost to run the gas line AND the electrical line in addition to the cost of the generator we just couldn’t proceed with a total price tag of almost $18,000.00, especially when the insurance companies in Canada don’t even recognize these!

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