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ICLR, Swiss Re call for industry discussion about overland flood insurance


November 17, 2010   by Canadian Underwriter


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The Institute for Catastrophic Loss Reduction (ICLR) and Swiss Re are calling on Canadian property insurers to bundle flood insurance into a standard homeowner policy.
In a joint report, Making Flood Insurable for Canadian Homeowners, ICLR and Swiss Re advocate a partnership between the insurance industry, government and private homeowners. It explores historical flood damages in Canada, current flood management practices at the national level in Canada and flood management practices for four case study provinces: Ontario, Quebec, British Columbia and Alberta.
Currently Canadians are forced to rely on government relief programs after overland flood events, the report observes. But flood insurance has many advantages over such programs, including quicker claims settlement through well-established insurer methods for assessment and payment, as well as risk-based premiums and deductibles that provide homeowners with the incentive to take action to reduce flood risk.
In the United Kingdom, insurers have bundled flood with fire and theft for more than 50 years, the report notes. This is the best-suited model for Canada, too, says Sharon Ludlow, Swiss Re’s chief agent in Canada.
“Canada is the only G8 country where flood insurance is not available to homeowners,” says ICLR executive director Paul Kovacs. “With other forms of water-damage being covered, such as sewer backup and burst pipes, and with commercial entities being able to purchase flood insurance, the coverage void tends to confuse – even anger – homeowners when they discover that they are not covered after a flood event.
“The provision of flood insurance for Canadian homeowners will put Canada in line with most other industrialized countries, and end any confusion that exists with regard to water-damage claims.”


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