Climate change is real and its costs to Canadian homeowners are increasing.
An increase in the severity and intensity of extreme weather events over time as a result of global climate change has resulted in more flooding and water damage to Canadian homes.
Thirty years ago, insured losses for extreme weather averaged around $400 million a year. Now that average is closer to $1 billion a year.
What Is Natural Disaster Insurance?
Catastrophe Risk Insurance, Disaster Insurance, or Catastrophic Loss Insurance are all acceptable terms connoting to insurance coverage for natural disasters. This insurance is intended to provide an individual or a company with the essential coverage to remunerate their expenses in times of loss or damage during a calamitous event, usually brought about by extreme weather conditions.
Many people are confused about whether insurance companies cover disasters of this kind or not.
Some wonder when they can rebuild their damaged homes or properties since insurance companies may deny the claims. In the occurrence of a disaster, a lot of questions might be raised.
While some people assume that insurance providers do not cover these disasters, damages caused by a natural disaster can, in fact, be covered. This type's insurance policy includes coverage for floods, hurricanes, earthquakes, tsunamis, tornadoes, wildfires, blizzards, and snowstorms. Some unusual or severe weather is included in particular insurance policies like windstorms, ice and hailstorms, heavy rainfall, fire and smoke damage, lightning, and damage caused by dropping items. Certain types of natural disasters are common in a specific place, so it can be easy to predict them depending on where you reside. For example, there's a huge possibility of flooding in coastal areas, wildfires in vast forest areas and woodland areas, earthquakes on fault lines. However, like most natural disasters, they are unforeseeable, making it tough to predict or include the right coverage in a policy of this kind.
The weather patterns in Canada are ever-changing, and severe weather is occurring more regularly. Be in the know of what the authorities and the insurance industry are doing to lessen damages and losses and the steps that they can take to help manage a crisis when disaster strikes.
Extensive damage can result from torrential rains. Damage from torrential rains can be extensive. Insurance policies may have coverage to help protect against sewer backup damage.
Windstorms can cause disastrous effects and can be extremely hazardous. Be updated on what damages or losses your insurance company may cover and understand how to take precautionary measures against a windstorm.
Another natural disaster where no one can stand firm in is fire. Wildfires, especially, are so tough to contain and are very unpredictable. Learn the steps of extinguishing fires at home and reduce your possible risk of a home fire.
Ice can also cause huge damages resulting from ice and hail storms. It was estimated to have caused more than $ 1 billion worth of damages since 2011. You can know more about to what extent of damages can be covered by insurance.
Earthquakes can have detrimental effects and can damage, both directly and indirectly, to structures, roads, etc. The sad thing is they may not be covered by insurance. Damages and losses brought about by this type of natural disaster can also be lasting and disturbing.
What is covered by Natural Disaster Insurance?
Disaster insurance provides compensation for losses and damage due to the result of a large-scale disaster. It can cover the following:
- wounded persons
- damage to private or business properties
- damage to movable properties
- industrial risks
- livelihood or earning loss due to an interruption in business operations
- repair/replacement costs for damaged items, vehicles or equipment
- travel interruption
- rehabilitation costs
The outcomes of extreme weather and unforeseen calamities on individuals and companies are vast. That means that if these natural disasters are not specifically stipulated in regular Home, Vehicle, Business or Travel Insurance policies, then it's essential to pay more than the usual attention when selecting and determining the appropriate general Disaster insurance policy that covers specific risks and possible damages.
What Type Of Natural Disaster Insurance Should I Buy?
Disaster Insurance can either be bought as a standalone package or as a specific type of loss or damage within an insurance policy. Some types of policies that typically include Disaster Coverage are:
- Business Interruption
- Home Insurance
- Flood Insurance
- Sewer Back-Up
What Does Disaster Insurance Not Cover?
Some areas are undeniably disaster-prone. For example, people living in houses built in frequently flooded areas or high-risk locations may find it tougher to find insurance than individuals in other parts of the country, which are less prone to disasters. This is because repair and replacement costs for those areas will eventually outweigh the cost of insurance premiums paid for after being always beaten by those natural disasters. You may find insurance companies that would cover those situations. Still, you may face yet another obstacle, almost prohibitive insurance premium charges.
Homeowner policyholders should also need to review the kind of flood insurance included in their policies, if any. Many home and property insurance packages cover risks from flooding, yet not really for 'overland flooding,' but for 'sewer backup.'
Do you know the difference between the two? Overland flooding has coverage on water damage caused by outside water leaking into the walls or basement, while sewer backup denotes damages from an internal overflowing sewage system. It's critical always to make a habit of checking the terms stipulated in an insurance package and understand the exact meaning of the wording since the authorities are becoming more resistant to compensate for flood damages as part of natural disasters. Misinterpreting something from your policy can be a costly thing.
Some situations like earth movements, earthquakes, sinkholes and landslides are very tricky for insurance claims. It is because regular home insurance policies do not include these types of conditions. Look for 'named perils' specifically worded in the policies. However, not all policies offer financial protection for the outcomes of the conditions mentioned above.
Disasters that are human-made, such as war or nuclear accidents, are standard exclusions to most insurance policies.
Who Needs Natural Disaster Insurance?
As natural disasters vary from every region, it can be very taxing to recommend some kinds of coverage packages. Should disaster strike, it could cause immense physical and financial damage to people and properties.