The insurance industry is still calculating the cost of damage caused by the wind storm that ripped through Ontario on May 21, but adjusters are already saying it will be well over $30 million.
“Based on what we do know, it is a very significant event. This will be considered a catastrophe in insurance terms,” says Rob de Pruis, national director of consumer and industry relations with the Insurance Bureau of Canada (IBC). “An event that has $30 million or more in insured damages is formally tracked as a catastrophe.”
During the storm, tornadoes touched down in London and Uxbridge, winds snapped hydro poles and toppled transmission towers in Ottawa, and trees crashed through roofs in Peterborough. Insurers are working around the clock to process all of their customers’ claims, de Pruis says. But even with the extra effort, it could take weeks before an insurance adjuster is able to look at your claim.
“We’re dealing with not only homes, vehicles, and businesses, but also secondary residences like cottages, as well as aircraft and marine, and all these other areas that can be impacted,” de Pruis says.
Insurance companies have catastrophe response plans in place for major events, such as the May 21 storm. When the plans are implemented, the insurance companies sort their claims into a priority sequence. “People that have significant damage where they can’t live in their property would be put into a higher priority than someone who may have a vehicle that’s dented,” de Pruis says.
Other factors that can delay a claim’s processing is finding a contractor to do the necessary work. Kevin Stairs of Glenwood Construction out of Peterborough says he’s been swamped with calls, but due to project commitments booked before the storm, requests for work on major structural damage are being pushed into 2023. Some projects are being scheduled as far into the future as 2024, he says.
“If you go back even a few years, the Peterborough area had the 407 coming then the housing market started heating up, and then COVID, and catch up due to supply chain issues. So, most good contractors are booking months and months out,” he says.
When he can, Stairs is slotting in smaller projects that take a day or less, such as replacing a window that got broken during the storm. But the lack of availability of local contractors is forcing many people to hire contractors from out of town.
“I would advise anybody that calls us, if we can’t get to them right away, which in most cases we can’t, to do their research on the contractor they’re calling, especially if they’re from out of town,” Stairs says. “Don’t pay a deposit until you’re certain that the person is going to come back and actually perform the work.”
Before you have a contractor start working on your property, make sure you document the damage from the storm for your insurance claim. Once it’s safe to do so, de Pruis suggests taking pictures and videos of the damage and writing out a list of all the damaged and destroyed items.
If you have receipts for any of the damaged items, make sure to collect those for the insurance adjuster. Even if you’ve documented the damaged item with a picture, don’t dispose of it until after the insurance adjuster has had a chance to fully assess your claim. They may want to see the damaged item in person.
Will the storm damage cause my insurance premiums to rise?
Some good news on the insurance front is that the damage from the storm shouldn’t increase your premiums. “Typically, no one single event leads to an automatic increase in insurance premiums. The insurance companies are well prepared and very well capitalized for these events. This is what they do. This is what they’re here for,” de Pruis says.
“The principle of insurance is the premiums of the many are paying for the losses of the few. The more you can spread out that risk over larger areas, the more stable premiums become so that particular communities are not significantly impacted or have significant changes in premiums because of one event.”
Since most insurers are global companies, a storm in Ontario won’t affect premiums. What will affect premiums, de Pruis says, is a steady increase in the frequency and severity of weather events.
“Between 1983 and 2008, the insurance industry was paying out on average about $422 million in severe weather-related losses across the country. Over the past decade, that number has increased to over $2.1 billion on average, annually. That’s more than a four-fold increase in the overall costs of severe weather damage,” de Pruis says.
Most home and recreational property insurance plans will cover severe weather, such as wind damage. But to make sure you’re covered, de Pruis advises reviewing your policy.
“A lot of this conversation is about preparedness. To make sure that people do have some type of a plan. Even something as simple as knowing what phone number to call if you do have a claim,” de Pruis says. “Having that information readily available so you can start the process can be very helpful.”