Climate change & insurance (con't)

In response the company is removing its so-called “vanishing deductible.”

Unifund says this means that in event of a water or sewer back-up loss “you will have to pay your policy deductible, it will not be waived.”

Unifund says it isn’t only climate change which is causing a surge in water claims.

It says that “urban expansion has outpaced existing drainage and sewer infrastructures.”

Insurance Bureau of Canada spokesman Pete Karageorgoa said that, whatever the cause, water damage claims have been soaring in recent years.

“Water is the new fire,” he said. “Water is now taking over as the leading cause of claims.”

Karageorgoa pointed to weather trends.

“These one in 20, one in 50 year storms are happening with greater frequency.”

Insurer Aviva Canada says that 40 per cent of all home insurance claims are water-related.

Moreover, the average cost of a claim “rose 160%, from $5,423 in 2000 to over $14,000 in 2010.”

Aviva’s Wayne Ross, in a release, blames “two main causes.”

One is the “increased frequency of severe rainstorms” compounded by the “lack of sufficient infrastructure in most communities” to handle large amounts of water in a short period of time.

The other is “the amount that homeowners are investing in finishing their basements."

Karageorgos says claims are rising from modern living, such as people moving their laundry machines from the basement to other floors of their houses.

“In the old days, in my parents’ house, laundry machinery was in the basement,” he said. “If you had a flood there no big deal.

"In many cases there was an unfinished basement.”

Aviva paid out $124 million in water claims last year.

Both Unifund and Aviva have taken extra steps to warn homeowners about potential water damage, including having sections on websites and publishing pamphlets.

WindsorOntarioNews.com