Insurance claims from Hurricane Fiona could reach $700-million, but flood damage from storm surge won’t be covered

With insurance for coastal flooding damage largely unavailable, much of the recovery costs from post-tropical storm Fiona that swept through Canada’s eastern provinces on Saturday will likely be borne by homeowners and government disaster financial assistance programs.estimated losses could range between $300-million to $700-million of insurance claims, said Marcos Alvarez, the head of insurance of DBRS Morningstar.

“The impact of being closed for a long length of time for some of these companies may be greater than any physical damage they incurred – and can end up costing millions in claims,” Mr. Alvarez said. Residential home insurance policies typically don’t offer automatic coverage for flood damage – and even the vast number of add-on flood policies do not include damages from storm surges, said Amanda Dean, vice-president, Atlantic, for the Insurance Bureau of Canada, an industry association.

“Our understanding is that it’s very limited in scope so far,” he said. “It’s very limited as far as where it’s available. And it’s expensive.” “If you’re prone to hurricanes or storm surge, or coastal flooding, the cost will reflect that,” she said. “However, this plan is very much in its infancy and no one leading up to Fiona would have had storm-surge protection on their home insurance policy,” Ms. Dean said.

Source: Insurance Report (insurancereport.net)

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