How you can help your customers with severe weather patterns
From flooding to wildfires, Canada has seen an increase in the number of extreme weather events. The result is more weather-related insurance claims. In 2017, for example, Canadian insured losses from catastrophic events were $1.33 billion, according to Catastrophe Indices and Quantification Inc.
“Overall, we can say we’re seeing an increase in all weather-related events—particularly catastrophic events,” says Amy Graham, National Property Underwriting Manager, Personal Insurance, with RSA.
But what’s really changing, she says, is the frequency and lack of predictability. “We used to be able to say that a major flood might happen roughly every 10 years.” But now that’s just not the case.
Consider the recent floods in southern Ontario. In September 2016, Windsor and Tecumseh declared states of emergency when the cities were hit with intense storms that produced major flooding. A year later, the same region was hit again—with more than $124 million in insured losses.1
Then there are the wildfires: In 2016, wildfires devastated the Fort McMurray area of Alberta, resulting in roughly $3.7 billion in insured losses,2 which was the costliest catastrophic event in Canadian history. Last year saw another bout of wildfires hit southern Alberta.
How brokers can help
Graham says brokers need to be able to respond to their customers in an emergency event, but that comes with a lot of pressure. “I think brokers and companies are probably feeling, from a weather perspective, that just when we think we’re prepared, Mother Nature throws something new at us.”
Still, brokers need to advocate for their customers. “There’s going to be more demand on brokers to provide flexibility for their customers in terms of communication, to be able to reach out to them digitally,” she says.
Customers also need the right coverage, and it’s on brokers to ensure customers understand what’s covered in their policy and what isn’t—and what to do in the event of a claim.
Water, specifically, has its own unique issues and challenges with a lot of different aspects to it, says Graham. “Water is becoming the biggest property claim exposure in insurance. Some water losses are covered under the base coverage, and some require optional extension coverage. Brokers need to know where that difference in coverage lies in order to know what product is best for their customer.”
Brokers should also encourage customers to have an emergency preparedness and safety plan. “Water claims are never fun, so having the tools to try to mitigate or prevent damage from happening is key,” she says, adding that RSA’s Climate Smart website lists a number of ways to protect homes from water damage.
Extreme weather is here to stay. But brokers are key to ensuring customers take care of their property and prepare for future extreme conditions.
For broker and customer climate-related resources, visit RSA’s Climate Smart website here.
4 tips to help your customers
- Ensure customers know exactly what their coverage entails—and, more important, what is not covered.
- Have the ability to communicate with customers using various means—in particular, electronic media.
- React promptly to customers in an emergency event.
- Encourage customers to take proactive measures to protect their property
This article originally appeared in Canadian Insurance Top Broker.
1Catastrophe Indices and Quantification Inc.
2Insurance Bureau of Canada