How brokers personally assist during floods

The flooding last year in Grand Forks, B.C. was a prime example of how an insurance broker provides more than just policy advice and advocacy when disaster strikes.

A broker could provide money upfront for additional living expenses, emotional support to clients, liaise with government and municipal officers, and attend community meetings, just to name a few examples.

Resident Kyle Piper carries his bike from his house through the floodwaters in Grand Forks, B.C., on Thursday, May 17, 2018. THE CANADIAN PRESS/Jonathan Hayward

This was the case on May 10, 2018, when torrential rainfall struck Grand Forks, trapping some people in their homes and causing widespread flooding. At the time, hundreds of homeowners were evacuated, with thousands put on evacuation alert.

Skip ahead to the present day, and flooding continues across Ontario, Quebec and New Brunswick. While it’s too early to see how carriers are covering overland flood in these events, Canadian Underwriter has heard that there is sometimes an inconsistent approach to overland flood coverage.

This was also apparent during last year’s flooding, said Sam Cowan, vice president of sales and marketing with RHC Insurance Brokers, which has an office in Grand Forks.

In one case, a commercial building was inundated with both sewer backup and overland flood water. “The building owner had no coverage because the insurer decided to deny it and the two tenants inside the building both had coverage provided under the sewer backup endorsement,” Cowan explained.

He added that new industry guidance for residential properties is that sewer backup in concurrence with overland flood water is not covered. During the Grand Forks flooding, “you could go down one street and you had one person with full policy limits, the next door neighbour had no coverage and then the neighbour after that has a limit of $10,000 coverage provided,” Cowan said Tuesday. “It was also all over the map. It wasn’t consistent to geography or placement to the proximity to the river. It was just terrible to be quite honest.”

Advocating for clients is obviously an important part of being a broker. “We had the same insurance company denying one claim on the street that a different adjuster is providing coverage for,” Cowan said. “It’s a matter of us holding the insurance company’s feet to the fire, saying, ‘You need to handle this in one proper fashion.’”

Liaising with government and municipal officials was another part of the job, as was providing “a voice from insurance industry.” In one case, a municipality had sent out a notice advising residents to contact their insurance company, as they may be covered under sewer backup if they don’t have overland flood coverage. Brokers had to advise officials on the new guidance excluding coverage for residential claims when sewer backup was mixed with overland flood.

Another way of assisting clients was providing upfront money to clients for additional living expenses. Again, carriers took an inconsistent approach, where some authorized paying out these expenses while others didn’t. “We literally had people showing up in our Grand Forks office in their slippers and housecoats saying, ‘I didn’t even grab my wallet, I’ve got nothing. Can you give me something?’” Cowan recalled. “We ended up issuing a whole bunch of $5,000 cheques to customers, just so they could get something right away.”

Brokers were also there to provide emotional support and advice on services, such as where the local Red Cross was. “So, just listening to people and having a conversation and being empathetic about their situation and trying to offer advice when possible,” Cowan said. “You had people coming in, their lives were completely devastated and they had nothing left.”