Ontario storm costs $400 million (September 01, 2005)

Canada’s car, home and business insurers will likely have to pay out more than $400 million to help Southern Ontario recover from the storm that hit on August 19, resulting in what the IBC calls the “highest insured loss in Ontario history.”

The series of storms, including two tornadoes, wreaked havoc on southern Ontario, destroying homes, flipping cars, downing power lines and more.

Environment Canada rated the tornadoes an F-2 (a “Strong” rating on the Fujita scale). The winds peaked at between 180 and 240 km/hr and cut a 300m wide perimeter of destruction.

In response to the storms, Fergus ON declared a state of emergency, although extensive damage was incurred, no deaths or injuries were reported.

Toronto also experienced severe storms, but no tornadoes. However localized flash floods caused great damage, paralyzing the city’s main transit routes and flooding cars, necessitating emergency clean up crews.

The severe weather began in Milverton, ON due to humid and unstable weather and moved east to Fergus.

Cleanup crews, including claims adjusters such as Cunningham Lindsey Canada, responded to the series of severe storms.

“To date, insurance companies have reported a huge volume of claims – more than 15,000 and growing,” Mark Yakabuski, IBC’s vice-president, federal affairs and Ontario, says. “It can take months to determine the full impact of a once-in-a-100-year storm like this, but the latest insurance industry information suggests that claims are likely to exceed $400 million.”

Insurers faced the added challenge that the August 2005 storm damage from thundershowers and tornadoes was not limited to a small geographic area. “This storm pummeled communities from Kitchener-Waterloo, to Toronto, to Durham region and beyond,” Yakabuski says.

“Adjusters have been doing a tremendous job responding to their policyholders and helping them in the claims process. While there’s no replacing items like the family photo album, the industry is doing what it can to return people to their normal lives as soon as possible,” he adds.

The vast majority of claims are for sewer backup. Sewer backup is typically purchased as an addition to a homeowner’s policy. There have also been a number of auto claims and many businesses were damaged.

In the Fergus area, where two tornadoes touched down, there have been property claims for wind damage.

“The impact was nowhere near the devastation suffered by the victims of Hurricane Katrina, of course, but there are a lot of residents and business owners out there still trying to cope with substantial losses,” Yakabuski says.

Other recent Ontario disasters include the 2004 Peterborough flood, which cost $95 million.