Taking steps to avoid water damage should be rewarded: CEO

Homeowners should be rewarded if they do their part and install equipment to help mitigate insurable water damage, a growing concern given the increase in extreme weather events believed to be linked to climate change, Maurice Tulloch, president and CEO of Aviva Canada, said at a conference on Oct. 18.

“We no longer say, ‘Is climate change going to happen?’ It’s absolutely happening,” Tulloch said during the CEO panel, part of the Insurance Brokers Association of Ontario’s 2012 Convention in Toronto. “We’ve had hailstorms, we’ve had Slave Lake, we’ve had flooding, we’ve had massive rain events.”

It is incumbent on insurance companies to help inform at the industry, broker, government and consumer levels, he said.

Consumers can have protective devices such as backwater valves installed for as little as hundreds of dollars, he noted. “But what we better be prepared to do, when we inform and they act, is reward, and reward with a better rate because they’ve taken those preventative measures.”

Information from the Insurance Bureau of Canada (IBC) notes that measures to prevent water-related damage include installing backwater valves or plugs for drains, toilets and other sewer connections; installing a sump pump; anchoring fuel tanks to the floor to avoid fuel spills or fuel catching fire during a flood; and installing flood shields or built-up barriers for basement windows and doors.

At the municipal level, Tulloch pointed to the promise of the municipal risk assessment tool (MRAT), an IBC web-based resource now being refined that is designed to help communities and insurers assess potential infrastructure failure.

Tulloch reported that Toronto is effectively looking to spend about $14,000 per household to upgrade infrastructure in 100 neighbourhoods that have been identified as problematic.

Alister Campbell, CEO at The Guarantee Company of North America, said during the panel that this represents an opportunity for brokers who serve areas within communities that have or will be identified as having an issue.

“Think practically about how you will advise your customers about how to protect themselves properly,” Campbell said. “Advise your customers about whether or not they should be installing these things, and getting them a deal and helping them do it,” he added.

It is a chance for brokers to help customers “manage something that is inevitable, clear and really matters to the thing they are spending the most on in their life – their homes.”