Canadian Underwriter

Insurers may be flooded with storm damage claims from Alberta

June 23, 2005   by Canadian Underwriter

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Flooding is no longer the only force damaging residences in Alberta. Environment Canada has now released reports of several tornado sightings near Vauxhall, Taber and Coalhurst with at least one of them touching down. In addition, heavy windstorms and golf-ball-sized hailstones hit areas west of Calgary.
Flooding, environment Canada says, is subsiding in many areas but tornadoes, hail stones and damaging winds persist, leaving Canadian insurers with what could be significant claims due to wind and other storm damage. Unlike flood damage which is only covered if the damage is incurred due to sewer backup not if it is caused from water entering through basement windows most policies do cover water damage from storms including tornadoes, wind and hail when the damage is caused by water coming in through storm-damaged roofs and windows. Currently, no reports of injuries or property damage have been reported.
Areas in southeastern Alberta are under tornado and extreme thunderstorm advisories however, other areas such as Drumheller where 3,200 of 8,000 residents were forced to flee, are seeing the return of many evacuees.
In addition, the 48-hour state of emergency in Edmonton was recently cleared and in Calgary, the city’s first local state of emergency was lifted.
The Insurance Bureau of Canada says the first floods caused as much as $60 million in damages and they initially estimate the second onslaught of flooding may skyrocket to $200 million in damages.