November 14, 2017 by Greg Meckbach, Associate Editor
Amid concerns about the frequency and severity of flooding in Canada, insurers are advising brokers to “stay on top” of the various water coverage products in the market, as well as to bear in mind that different carriers are taking different approaches to water risk.
“It’s a complex area and it’s a rapidly-evolving area right now,” Craig Stewart, Insurance Bureau of Canada (IBC)’s vice president of federal affairs, said in an interview Tuesday. “So, it’s important for brokers to stay on top of the various products that are being offered and the differences between them.”
Overland flood was generally unavailable in Canada until 2015, when major insurers started offering such coverage on some home insurance policies.
Brokers working with consumers are particularly alive to any pricing increases in home insurance policies for overland flood coverage after major floods in Alberta and Ontario.
The Insurance Brokers Association of Canada assembled a task force that publicized a flood principles document in 2016. Personal flood insurance should be “available to Canadians who need insurance,” and “must be affordable,” IBAC stated in its flood principles document.
Currently, in 2017, IBC has not “heard anything about raising premiums,” Stewart suggested Tuesday.
“Canada is a very competitive market, so our expectation is that market pressure will keep premiums competitive,” Stewart said. “We do know that different insurers are taking different approaches with addressing the risk.’
For example, some insurers are addressing flood risk through “deductibles and some are going fully on to risk-based pricing, which means it is going to be very expensive for high-risk properties.”
Brokers are advised to shop around for customers, he added.