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Most Canadians not aware of common home insurance condition that could result in a denied claim: Square One Insurance


November 16, 2015   by Canadian Underwriter


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Vancouver-based Square One Insurance Services Inc. has found that the majority of Canadians are not aware of a common home insurance condition that, if not met, eliminates coverage for damage from frozen pipes.

The condition requires homeowners who are away for more than a few days to turn off water at the home’s main source and drain all pipes or arrange for someone to enter the home daily and ensure that heat is maintained

Square One Insurance said on Monday that it recently conducted a survey and found that 91% of the 1,200 people surveyed were not aware of the condition. The condition requires homeowners who are away for more than a few days to turn off water at the home’s main source and drain all pipes or arrange for someone to enter the home daily and ensure that heat is maintained.

“With the cold temperatures we experience across Canada, it’s important the insurance industry takes steps to educate homeowners of this condition,” said Jason Vander Zalm, Square One vice president, in a press release.

If temperatures in a home drop low enough, water in pipes can freeze, the insurer explained in the release. As the water freezes into ice, it expands and causes the pipes to rupture; as the ice melts, significant water damage can occur. “The situation worsens if the homeowner is away when the pipes freeze, so it’s understandable that insurance providers have imposed certain conditions on homeowners,” Square One Insurance said.

“As our survey found, most people simply don’t know about this common home insurance condition,” Vander Zalm said. “Even if you do, it’s critical that you review your own policy because the condition varies from one provider to the next. For example, some policies require you take steps if away for more than 4 days while others provide 7 days. And, complying with the condition might be harder than you expect.”

The release said that earlier this year, an Ontario couple discovered their home “in shambles” when they returned from a winter vacation in Florida. They had turned off their water before departing, but they did not shut off the water to the fire sprinkler system as the building code requires it remain operative. The pipes leading to the fire sprinkler heads froze and burst, causing extensive water damage throughout the home, the release said. Their insurance provider denied the claim, stating that water to all pipes needed to be shut off and drained while the homeowners were away.

In another case, a woman was in hospital undergoing cancer treatment. She had been away from home for three weeks, when her furnace went out. The pipes froze and burst, again causing significant water damage throughout the home. While away, the homeowner arranged for a neighbour to keep an eye on her home. The neighbour picked up mail, but did not enter the home to ensure heat was maintained. Insurance coverage was denied because policy conditions were not met.

“The good news is that some insurance providers are updating the condition to allow for fire sprinkler systems to remain functional and for exceptions to be made in medical emergencies,” Square One Insurance reported.

Established in 2011, Square One Insurance currently serves B.C., Alberta, Saskatchewan, Manitoba and Ontario with home insurance policies that can be personalized to a customer’s unique needs.