REBOUND Water House fires and wildfires Earthquake - BC Broker
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REBOUND
P R E V E N T I O N . P R E P A R E D N E S S . R E S P O N S E . R E C O V E R Y.
What you need to know to…
prevent loss from
• Water
• House fires and wildfires
• Earthquake
and how to
• Protect your strata property
and
• Be ready
• Recover quickly
o n
i ti
E d
bcbroker.ca
1 9
2 0
Throughout B.C., insurance brokers are close
by and ready to serve, providing choice, advice
and claims advocacy to protect families and
businesses. We know our customers, our com-
Throughout B.C., insurance
munities brokers
and our business. Weare in the
know therisks
office
early and ready
British to serve, providing
Columbians face andchoice,
how to advice
mitigateand
losses and
claims advocacy torecover
protectquickly. We’re
families not businesses.
and just at the
end of the phone. We’re at the end of the block.
We know our customers, our communities and our
We’re always right there.
business. We’re not just at the end of the phone –
we’re at the end of the block. We’re always right there.
BCBroker.ca
Hope for the best.
Plan for the worst.
Take a little time now to think about the things you can do to prevent
or minimize a loss, and for those unforeseen events, what will make
recovery faster and easier afterward. We’ll all be stronger for it.
Water. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
• What water damage insurance covers
• Prevent water damage
• When leaks and floods happen
House Fires. . . . . . . . . . . . . . . . . . . . . . 6
• Hotter and faster
• Preventing a house fire
• After fire damage
Wildfires . . . . . . . . . . . . . . . . . . . . . . . . 8
• Be FireSmart
• The 2017 wildfire season
• Causes of wildfire
Earthquake. . . . . . . . . . . . . . . . . . . . . 10
• B.C.’s earthquake threat
• What earthquake insurance covers
• What to do during and after an earthquake
Strata. . . . . . . . . . . . . . . . . . . . . . . . . . 13
• Insurance basics for stratas
• When a loss occurs
• After an insured loss in a strata building
Be ready . . . . . . . . . . . . . . . . . . . . . . . 16
• Have a plan
• Who will help in an emergency?
• 10 things to include in an emergency kit
Recover quickly . . . . . . . . . . . . . . . . . 18
• Do this now
• Start the claim process
• Useful links
REBOUND
Our expertise. Your resilience.
Rebound is a publication of the Insurance Brokers Association of British Columbia. Our goal is to provide timely information
for customers of B.C.’s property and casualty insurance brokers so that they can prevent losses where possible, and recover
quickly. We believe that the best way to manage risk is to purchase insurance through an insurance broker.
Insurance Brokers Association of British Columbia
Suite 1600, 543 Granville Street, Vancouver, BC V6C 1X8. Phone 604-606-8000 • www.bcbroker.ca • May 2018
PUBLISHER PROJECT EDITOR DESIGN GRAPHIC PRODUCTION PHOTOS
Chuck Byrne Trudy Lancelyn ABC Arno Apeldoorn Wil Wong, Susan Mellor istockphoto.com
cbyrne@ibabc.org tlancelyn@ibabc.org New Collider Insurance People Media Ltd. allcanadaphotos.com
REBOUND 3
WATER
IT SEEMS TO RUN COUNTER to our constantly “new and improved” world that the risk of water
damage just keeps getting worse. In fact, it’s being said that “water is the new fire” because fire damage
used to be the peril that worried property owners the most. Flooding is now the costliest hazard in terms
of urban property damage, surpassing fire and theft as the main source of property insurance claims.
Why can’t we get a better handle on water damage? Part of the answer, depending on your
location, may be…
• Changing weather patterns are leading to more extreme snowmelt and rainfall. Flooding is the
most frequently occurring natural hazard in Canada. About 20% of Canadian households are at a
high risk of flooding. Municipalities and regional districts are coming to terms with the impacts of
climate change, and are reviewing their flood-control systems and changing their bylaws and poli-
cies as to where development can occur.
• We’re paving over more ground in populated areas; instead of soaking into the ground, water
courses through stormwater systems, sometimes exceeding their capacity.
• Aging infrastructure – water and sewer pipes are, in some cases, more than a century old, or are
no longer adequate for the increased neighbourhood density. Urban planners are applying new
science and techniques to handle drainage, but retrofitting older systems is expensive.
When water escapes from pipes or enters the home from outside – such as when rivers or storm
drains overflow – it spreads and soaks every accessible nook and cranny. Once it starts, water dam-
age is difficult to curtail, costly to repair, and the longer your contents are wet, the more likely that
mould and bacteria will result.
The frequency and cost of insurance claims from in-home water escape have increased in recent
years because there are more things to go wrong – dishwashers, water-dispensing refrigerators,
4 REBOUND
in-suite washing machines, multiple driveways to make sure they haven’t
bathrooms. In addition, finished base- settled over time and are causing What you need to know
ments, laminate floors and high-end water to drain toward your house. • Damage to homes caused by hail or
finishes add to the cost of repairing • Consider landscaping with native wind is usually covered. This includes
water damage. The increased density plants and vegetation that resist soil damage caused by flying debris or
in many communities means that water erosion. falling branches or trees, or damage
escape from one dwelling unit can often • Clear snow away from your home’s caused by water entering through sud-
affect neighbouring properties. foundation. If the ground is sloped den openings caused by wind or hail.
one inch per foot near your home, • Coverage for sewer backup or overland
What water-damage move snow three to five feet away to
help minimize flood problems.
flooding is not automatically included
in your homeowner’s insurance policy.
insurance covers • Keep water out of window wells. Talk to your insurance broker for more
?
• Sudden and accidental bursting of • Make sure downspouts extend away information and options.
plumbing pipes and appliances is from your basement wall. Water should • Is your basement at risk of flooding?
covered by all home insurance poli- drain away from your home and neigh- Go to www.basementfloodreduction.
cies. However, damage may not be bouring homes. It should drain toward com and take the quiz.
covered when freezing causes the the street, backyard or back lane.
escape of water.
• Water damage from, for example, recording the highest levels in nearly
a burst pipe is covered under a
homeowners’ policy. Water that Q&A 50 years. When the spring run-off be-
gan, thousands of B.C. residents were
backs up through sewers is covered What’s the difference between evacuated either as a result of flooding
if you purchased an optional sewer overland flooding and water damage or as a precautionary measure.
backup endorsement. Speak to your resulting from leaking pipes or sewer Until 2015, Canadians who suf-
insurance broker to understand your backup? fered overland flood damage had to
options and coverage limits. • Overland flooding usually occurs rely on the B.C. Disaster Financial As-
• Water damage in a basement due when bodies of water, such as riv- sistance (DFA) program for compen-
to a sewer backup is only covered if ers, dams and other watercourses, sation because overland flood losses
specific sewer backup coverage has overflow onto dry land and cause were not insurable. But often the
been purchased. damage. program did not fully compensate the
• Coverage for overland flood damage • Sudden and accidental bursting full extent of losses. Many Canadian
is now available as an add-on to the of plumbing pipes and appliances insurers are now offering overland
basic policy (as long as sewer backup is covered by all home insurance flood coverage; talk to your insurance
coverage has also been purchased) policies. However, damage may broker about your risk and coverage
for the majority of homes in B.C. not be covered when freezing options.
causes the escape of water. Water Because overland flood insurance
Prevent water damage in a basement due to a
sewer backup is only covered if
is in the transition of becoming an
affordable option for homeowners,
damage specific sewer backup coverage Emergency Management BC “is
• Store valuable items in upper floors has been purchased. closely monitoring the availability of
of your home, away from the base- overland flood insurance in B.C. and
ment. Don’t store hazardous materi-
als like paint, oil and cleaning sup-
What to do when leaks will continue to deliver DFA in ac-
cordance with existing legislation. If
plies in the basement. In the event and floods happen a flooding disaster occurs and DFA
of basement flood, they can leak and • Electricity and water are a dangerous is authorized for a disaster event, an
create an environmental hazard. mix. Before you charge into a flooding applicant who could reasonably and
• Use water-resistant building materi- basement to rescue your belongings, readily have purchased overland flood
als and storage containers below be safe. Turn off the circuit breaker to insurance would not be eligible for
ground level. the house (or, if you can’t reach the cir- DFA.”
• Install a sump pump with back-up cuit box, call your utility and ask them EMBC expects that eventually over-
battery power, and backflow valves to do it for you). Wear thick waterproof land flood insurance will be reason-
for drains, toilets and other basement boots and gloves to protect against ably and readily available for single
sewer connections. Consider install- toxic elements in the floodwater. family residential homes across all of
ing electronic sensor devices that will • Know how to turn off the main supply B.C. “The phrase ‘readily available’
alert you when a leak occurs and will of water to your home. means that a person could obtain
automatically turn off your water. this insurance from a local agent or
• Install flood-pans under hot-water Overland flooding broker. ‘Reasonably available’ should
heaters and washing machines.
• Ensure proper lot grading. If possi-
and ‘readily available’ not be confused with affordable.
What a person can afford is subjec-
ble, build up the ground around your insurance tive and specific to that person. What
home to allow water to drain away In 2017 mountain snowpack along is important is that the price of the
from your basement walls. the entire length of the Fraser River was insurance is reasonable considering
• Check sidewalks, patios, decks and higher than normal, with some areas the risk.”
REBOUND 5
HOUSE FIRES
IN THE DAYS BEFORE ELECTRICITY, when home heating and cooking involved open flames,
a single household fire could quickly spread and destroy an entire city – as happened in Vancouver
and New Westminster in 1886 and 1896 respectively.
The sombre respect fire has commanded for centuries is still evident today in the contracts of
insurance and the laws that govern them: fire coverage is still the cornerstone of the standard insur-
ance contract.
Virtually every residential insurance policy covers damage caused by fire as long as the fire was not
started intentionally by, or at direction of, the homeowner. But it’s a good idea to check that you have
sufficient coverage for all your belongings. For example, if you have some especially valuable items
such as jewellery, electronics, recreational equipment, musical instruments, wine or art collections,
you should notify your insurance broker. He or she can explain the coverage provided by your insur-
ance policy and offer options for additional coverage if applicable.
Today’s house fires are ated by combined kitchens and great rooms, in
comparison to older designs that contained fire
hotter and burn faster within rooms and slowed its spread. This leads
Firefighters say modern homes, furnished to a situation where, if there is a fire, it burns
with oil-based products, burn faster and present much hotter, more rapidly, and the smoke is
dangers never seen before. much more toxic.
Where older construction used more solid Luckily, smoke and carbon monoxide detec-
wood, today’s construction and furnishing ma- tors are more sophisticated – they need to be.
terials are likely to be laminates and synthetics Today’s house fires burn eight times faster and
that contain foams, glues and petro-chemicals. produce 200 times the amount of smoke that a
Open-concept designs allow flames to be fed by fire would have 50 years ago. A test by Under-
oxygen and quickly fill the large spaces cre- writer Laboratories, a not-for-profit product-safety
6 REBOUND
• Electrical switches, outlets, cords especially if you have wood or vinyl
and plugs, and fuse and circuit- siding.
breaker boxes are among the • First responders would like to see
leading causes of home fires and residents go a further step and
fire deaths. Today’s appliances and install sprinklers. The Canadian
electronics can put a heavy load Association of Fire Chiefs has urged
on electrical systems, especially in changes to the National Building
older homes built before modern Code to require sprinklers in new
electric products were available. home construction.
Don’t overload your electrical system
with power bars and extension cords,
and don’t attempt to upgrade your What you need to know
electrical system yourself. If you • The most important step to ensure
have any doubt about your home’s your family’s safety from fire is to install
electrical capacity, call for a profes- smoke detectors, and check them
sional inspection. regularly to ensure they are functioning
• Teach children about fire safety. properly. They are inexpensive – availa-
After electricians, children make ble at any hardware store for less than
up the demographic most likely to $20 – and they save lives. Replace
be affected by an electrical injury. them at least every 10 years.
Electrical cords and extension cords • Is your home fire-safe? Take the quiz at
cause almost two-thirds of electrical http://safeathome.ca
burn injuries to children ages 12 and
under.
• Manage heat sources responsibly. Get out fast!
Have your fireplace inspected and • Plan an escape route and a safe
cleaned annually. Don’t leave your meeting place in case of an emer-
stove unattended while cooking. gency.
Monitor heaters and candles. Clean • Ensure there are two ways out of
out the lint trap in your clothes dryer every room.
frequently. Use your outdoor barbe- • Regularly check and test all smoke
cue with extreme care; move it well and carbon monoxide alarms.
away from walls and furniture before • Practice your home fire drill.
lighting it. • Newer smoke and carbon monoxide
• Properly store flammable materi- alarms have expiry dates on them.
als. Store gasoline, solvents, waste Make note of all alarm expiry dates
or other materials that may ignite and replace them before they expire.
?
at least 10 metres away from your • Don’t forget to mark your smoke and
home. carbon monoxide alarms!
testing and certification organization, • Remove dry leaves and debris. • Make sure your home or building ad-
found that an average-sized room Keep leaves, other dry materials dress number can be seen from the
furnished with modern products is fully and potentially flammable garbage street.
engulfed in flames in three minutes. away from the exterior of your house,
The same room, furnished with items After a fire
50 years of age, took 30 minutes to do • Thankfully, most home fires are par-
the same.
About 30 years ago when smoke
Q&A tial losses. However, the additional
damage from water and smoke can
detectors became more common, a be extensive.
person had up to an estimated eight What are the leading causes • Your first priority is to ensure the
minutes to exit their home from the of residential fires in B.C.? safety of all family members and
time their smoke detector went off. • Nearly 40% of fires in B.C. pets.
Today, a person has less than two result from common- • Don’t enter the home until emergen-
minutes – barely enough time to get place activities such as cy officials say it is OK to do so, and
out once the smoke detector starts cooking and smoking. don’t turn on any electrical switches
sounding. See Get out fast! • Two-thirds of houses that until the electrical system has been
catch fire do not have checked.
Preventing a working smoke alarms. • Call your insurance broker or insur-
ance company as soon as possible;
house fire they can arrange for site clean-up
The tragic thing about fire losses is and repair.
that they are almost always preventable. • To facilitate the claim process, docu-
• Install smoke detectors and keep a ment all property losses and take
fire extinguisher handy. photographs of damage.
REBOUND 7
WILDFIRES
NEARLY ALL BRITISH COLUMBIANS felt the effects of the extraordinary wildfires of summer
2017. If you weren’t among the 65,000 people directly displaced by the largest evacuation order in
B.C.’s history, then you were probably affected by the smoke and haze that blanketed much of the
province and extended across the prairie provinces.
Community expansion pressures are pushing new construction of homes and businesses into
farmland, grassland and forest. Being closer to nature is wonderful in so many ways, but it’s offset by
being at higher risk of a wildfire that can travel with ferocious intensity and speed. And country living
means that you may be farther away from fire departments and hydrants. Most of B.C. is served by
independent, community-based fire departments that employ a combination of career firefighters
and volunteers; consider the reaction time you can reasonably expect from your nearest responders.
Fire safety in country settings starts by ensuring that your home’s exterior finishes and landscaping
don’t add to the fire hazard.
8 REBOUND
B.C.’s 2017 wildfire season, by the numbers Causes of wildfires
12,164 sq. km.: Area burned, equivalent to more than a third of Vancouver Island. The According to the David Suzuki Founda-
worst level of destruction since 1958 when 8,560 sq. km. burned. tion, climate change doesn’t necessarily
$562.7 million: Estimated cost of fire suppression. The previous record was $382 start the fires, but it creates conditions
million in 2009. for more and larger fires.
• People are the leading cause of
45,000: Approximate number of people displaced at the peak of the fires.
wildfires in Canada. Half or more of
65,000: Total number of people displaced over the entire wildfire season. all wildfires are started by unattended
The previous record was in 2003 when about 45,000 people were campfires, carelessly tossed cigarette
forced from their homes. butts, sparks from machinery, yard-
70 days: Duration of the state of emergency that was declared on July 7. burning that gets out of control, and
The last time wildfires prompted the province to announce a state other human activities.
of emergency was in 2003, which lasted 43 days. • Lightning causes up to 35% of
1,351: Total number of wildfires. Canada’s wildfires and is responsible
for 85% of the area burned annually.
176: Number of fires that started over a single 48-hour period on July 7
Lightning increases as temperatures
and 8.
rise, with about 12% more lightning
4,700: Approximate number of personnel deployed at the height of the strikes for each degree Celsius of
wildfires, including firefighters and support staff. This includes the warming.
more than 1,200 personnel from outside the province or Canada • Drier, shorter winters and earlier
and the more than 2,000 contractors who helped out. snowmelt extend fire seasons and
?
300: Approximate number of Canadian Armed Forces personnel who lead to drier summers. Fuel on the
assisted. forest floor ignites more easily and
236: Aircraft deployed. fires spread faster over greater areas.
• Outbreaks of pests such as mountain
Zero: People who died in the fires. pine beetles – previously kept in
Source: BC Wildfire Service
check by longer, colder winters – have
where homes and businesses meet also killed and dried forests, adding
forests and grasslands and that are fuel to the fires. Because trees and
Q&A prone to wildfire.
The FireSmart program was de-
soils hold moisture on slopes, fires
can also increase the risk of flash
We sometimes hear people saying veloped in the 1990s by a non-profit floods when rains finally arrive.
that insurance coverage is not association of government agencies
available for a particular disaster and private businesses involved in land
or another because it was an stewardship. The program became a early home ignitions in the zone
“Act of God”? Is there an “Act of priority in B.C. in 2003 when forest where the fire made its transition from
God” exclusion in insurance? fires destroyed about 240 homes in the forest into urban neighbourhoods.
No. Some contracts – for example, Kelowna, Lake Okanagan and Barriere Once established, the fire would have
leases or work contracts – may include areas. spread from structure to structure as
clauses that limit the contract in the FireSmart guidelines work. The an urban conflagration, accounting
event of a disaster, but insurance by devastating fire in Fort McMurray, for the majority of home losses. The
its very definition must be much more Alberta, in May 2016 destroyed more report concluded that on average,
specific about what losses will be than 2,400 structures, resulting in the the surviving homes rated ‘Low’ to
indemnified. Insurance contracts list largest-ever insured loss in Canada. ‘Moderate’ for fire hazard using the
the perils that are covered, the limits The Institute for Catastrophic Loss FireSmart criteria, whereas homes
of coverage, and list the exclusions. Reduction investigated the loss to that were destroyed rated ‘High’ to
Contrary to popular belief, there is no understand why some homes survived ‘Extreme’ hazard.
such thing as an “act of God” exclu- the fire with little or no damage, while • In 89% of the side-by-side compari-
sion in any property insurance policy others were vulnerable to ignition and sons conducted (where one home
in Canada. In fact, insurers routinely were destroyed. survived and the other did not), the
pay for damage resulting from natural The resulting report, Why Some surviving home rated with substan-
disasters, including windstorms, hail Homes Survived: Learning From the tially lower risk.
and wildfires. Fort McMurray Wildfire Disaster 2, • 100% of homes/home groups that
concluded that homes whose owners survived extreme exposure without
Be FireSmart had adopted FireSmart guidelines igniting rated ‘Low’ hazard.
FireSmart 1 is the number-one miti- survived much more frequently than Home survival depends on condi-
gation program for wildfire in Canada. homes where they had not, despite tions in the ‘ignition zone’ around
It’s a set of guidelines for people who the extraordinarily harsh conditions. the home. While having a low overall
live and work in close proximity to the Wind-driven embers were the most hazard rating is important, a single
Wildland Urban Interface – the area probable cause for the majority of critical weakness can lead to home
1
https://www.firesmartcanada.ca/ loss.
2
https://www.iclr.org/images/Westhaver_Fort_McMurray_Preliminary_Aug_2016.pdf
REBOUND 9
EARTHQUAKE
THE THREAT OF A MAJOR EARTHQUAKE IN B.C. has received attention over the past few
years as a result of our increased understanding of two bleak realities:
1) The threat is larger and more imminent infrastructure and indirect losses due to
than had been previously estimated. supply-chain interruptions and network
Natural Resources Canada now predicts disruptions) of nearly $75 billion, of
that there is a 30% chance of a signifi- which only an estimated $20 billion will
cant earthquake happening off the coast be offset by insurance. In Japan and New
of British Columbia in the next 50 years. Zealand, where earthquake funding and
2) The potential level of damage and the resiliency plans were in place prior to
cost of recovery are both higher than had their earthquakes, recovery is taking 10
been previously estimated. According to years and entire communities have been
a comprehensive impact study by AIR forever changed.
Worldwide 3 for the Insurance Bureau of The Juan de Fuca Plate, which extends 1,100
Canada in 2013, a 9M event hitting B.C.’s km from B.C. to California, is one of several
southwest will have a total economic loss locked plates in the Cascadia Subduction Zone.
(including direct losses to property and When pent-up pressure causes the plates to
3
Earthquake Study: www.ibc.ca/ns/resources/studies/air-study shift, an earthquake of magnitude 9 on the Rich-
10 REBOUNDWhat earthquake
insurance covers
• Coverage for earthquake damage
is not included in a standard home
insurance policy, but can be pur-
chased as an add-on to your exist-
ing policy. Earthquake insurance is
subject to a higher deductible.
• If an earthquake breaks a gas main
and starts a fire, the resulting fire
damage would likely be covered
under a standard home insurance
policy. Your coverage will depend on
the legislation in your province or
territory. Speak with your insurance
representative for more information.
• In certain circumstances, homeown-
ers who are unable to return to their
home as a result of insurable dam-
age are entitled to additional living
expenses.
• Earthquake coverage is available for
your place of business. To mitigate
losses to your business in the event
of an earthquake, you can purchase
business interruption insurance.
What to do during
an earthquake
Wherever you are when an earth-
quake starts, take cover immediately.
Move to a nearby safe place and stay
What you need to know
• Coverage for earthquake damage
must be purchased separately.
• Earthquake coverage is subject to a
higher deductible. Ask your insurance
broker to explain your earthquake
insurance deductible and help you
calculate how much you would need
to pay to start reconstruction after a
loss.
ter scale is considered likely (Japan’s seismologists estimate that it could • Because insurance is readily available
earthquake in 2011 was 9M). Events cause damage comparable with that for earthquake losses, earthquake
measuring 6 and 7M have occurred sustained by Christchurch, New Zea- damage to personal property is
along B.C.’s west coast in the past cou- land, in 2011 when the most damag- not eligible for compensation from
ple of years, but luckily were far enough ing event registered 6.3 on the Richter the Disaster Financial Assistance
offshore to cause no damage. scale and occurred 10 kilometres program.
The Cascadia Fault, however, is not south-east of the town centre. • More than 60% of British Columbians
the only threat to southwestern B.C. Adding to the challenge of under- live in a region where some of the
Scientists in Canada and the U.S. standing and preparing for an earth- largest earthquakes in the world
have recently begun to study a new quake is our lack of experience. The occur. The proximate risks of shake,
fault zone with the potential to cause public, government, and the insurance landslide and liquefaction are
as much or even more damage. The industry all have experience with cop- expected to affect areas far inland;
Devil’s Mountain fault extends east- ing with major fire and flood events in experts predict effects could reach
west just south of the southern tip Canada, but when it comes to earth- Kamloops and Kelowna.
of Vancouver Island into Washington quake, we must heed the lessons that • For more information and resources,
State. Because it’s within about five people in other parts of the world have go to www.shakeoutbc.org.
kilometres of Victoria’s city centre, learned the hard way.
REBOUND 11there until the shaking stops. Keep in all of the floor buttons and get out of emergency help arrives so have your
mind: the elevator as soon as you can. emergency kit ready.
• Drop, cover and hold on. Take cover • If you’re in a vehicle, try to find a • Check for injuries and administer
under a heavy table, desk or other place, if possible, well away from first-aid as needed.
solid furniture. Avoid doorways and buildings, bridges, or overpasses • If safe to do so, check your home
areas near windows. Protect your and pull over to the side of the road. for structural damage and other
head and face. Stay inside your car, if safe to do so, hazards.
• If you’re indoors, stay indoors. If and listen to your car radio for in- • If you are evacuating, bring your
the aforementioned furniture is not structions from emergency officials. disaster safety kit with you.
available, additional safe places • Remain in a protected place until • Do not shut off utilities unless they
are in halls and corners, and under the shaking stops. Anticipate after- are damaged. Don’t light matches or
archways. shocks soon after the first quake. turn on light switches unless you are
• If you’re outdoors, stay clear of build- sure there are no gas leaks or flam-
ings and wires. Look out for falling
debris.
What to do after an mable liquids in the area. Don’t flush
the toilet if you suspect that nearby
• If you are in a wheelchair, lock the earthquake sewer lines may be broken.
wheels and protect the back of your • Remain calm. If you’re able, take • Wear gloves, protective clothing and
head and neck. care of life-threatening situations sturdy shoes.
• Avoid elevators. If you’re in an eleva- first. Remember, you may be on your • After looking after your family, check
tor when an earthquake starts, hit own for 72 or more hours before on your neighbours if you are able.
• If you need assistance, place “HELP”
signs in all of your windows.
• Turn on your battery-powered, hand-
cranked or car radio for broadcast
emergency instructions.
• Don’t use your land-line telephone or
vehicle, except in an extreme emer-
gency.
• Stay at least 10 metres from downed
power lines.
?
• Avoid waterfront areas because of
the threat of large waves and cur-
rents.
• Beware of secondary effects, such
as landslides and flooding.
Q&A
Do we know how an
earthquake will affect us?
• Yes, the Insurance Bureau of Canada
in 2013 released a very compre-
hensive analysis of the economic
impact of a major quake. It was the
first time that losses resulting from
liquefaction, tsunami, landslide and
fire were also estimated. This study
has provided the information neces-
sary for municipalities and organiza-
tions to develop contingency plans.
To access the report, go to www.ibc.
ca and search for keywords “earth-
quake study”.
• The study makes some startling
conclusions: of the estimated $70
billion in losses, only about $20 bil-
lion would be covered by insurance
(at today’s level of take-up). Areas
as far up the Fraser River delta as
Maple Ridge and Abbotsford will be
affected by liquefaction.
12 REBOUNDSTRATA
MORE THAN A MILLION British Columbians live in strata properties. In some urban neighbour-
hoods, most residents are in strata buildings.
Higher density and shared ownership require
specific rules and practices so that residents
Insurance basics
can live in harmony with each other. Indeed, it for stratas
can be said that the Strata Property Act estab- B.C.’s Strata Property Act sets the foundation
lishes another level of government for strata for strata properties to be insured through a
owners in that it sets out specific responsibili- combination of at least two insurance policies:
ties for managing their shared asset. one for the buildings and common amenities,
Strata owners each own a share of a property and one obtained by individual owners for their
that may be valued in the millions of dollars own property. (Additional coverage may include
and which, in many respects, operates like a warranty insurance for new homes, or tenants’
commercial building, with commercial-grade insurance.)
systems and equipment. The Strata Property Your building policy
Act provides a democratic system of governance All strata corporations, including bare land
and standards for strata operations that helps stratas and duplexes, must obtain and maintain
ensure the rights of owners and their responsi- property and liability insurance for the common
bilities to manage their asset well. property. The details of the common property –
Think of your strata property under three buildings, equipment, driveways and so on – are
levels of circumstance: outlined in the strata plan on file at the Land
1) How it operates day to day, Title Office1.
2) How it responds, or should respond, when The strata corporation’s insurance must be
comparatively minor mishaps occur, and for full replacement value – in other words,
3) How it should respond in the event of a what it would cost to rebuild in today’s market.
major disaster… are you prepared? The strata corporation must review the strata
1
https://ltsa.ca corporation’s insurance policy annually and
REBOUND 13insure against major perils as listed
in the act’s regulation: “the perils of
fire, lightning, smoke, windstorm, hail,
explosion, water escape, strikes, riots
or civil commotion, impact by aircraft
and vehicles, vandalism and malicious
acts.” Liability insurance must be for a
minimum of $2 million; however, many
larger strata corporations choose to
insure for a higher amount.
The act requires strata corporations
to report annually to owners on the
insurance coverage. Most fulfill this
requirement by including the insur-
ance declaration for the building policy
in the agenda package that goes to
all owners for their annual general
meeting.
The insurance declaration that
summarizes the coverage on the
building and common areas is a useful
document for all owners. It outlines the
coverage and the deductibles for spe-
cific losses covered by the policy – the
information you and your fellow owners
need in order to plan as a group.
• Take note of deductibles – this is the
portion of the loss that the strata
corporation must pay before the in-
surance company will pay for a claim
covered by the strata’s policy.
• The Strata Property Act provides that
owners’ approval is not required for
a special levy or for an expenditure
from the contingency reserve fund
to cover an insurance deductible re- Your unit policy corporation has to assess owners in
quired to be paid to repair or replace The unit policy includes several order to pay the deductible, your unit
damaged property. important coverages that are not in the policy may also include coverage for
• When strata owners purchase or re- building policy: furniture and contents, your portion, up to a certain limit, of
new their unit policy (also referred to upgrades made to the unit since that assessment. Talk to your insurance
as a condo policy), it’s good practice construction, living-out expenses in the broker for details.
to provide their insurance broker event a loss requires you to vacate dur- An owner who rents the unit to ten-
with the building policy declaration ing repairs, and third-party liability. ants needs a unit-owner’s policy, and
to that the broker can tailor the unit In the event of a claim against the tenants needs their own policy for their
coverage accordingly. building policy for which the strata own contents and liability exposure.
When a loss occurs
What strata owners need to know about earthquake Unit owners are responsible for
• Strata high-rises may be particularly susceptible to earthquake damage. Be sure repairing the damage should a loss
your strata building has an emergency plan. occur in their unit. When a loss occurs
• Your insurance policy for your strata building should include earthquake. In fact, that involves damage to walls, floors,
it’s a good idea to pass a bylaw making earthquake coverage mandatory for the windows or balconies (i.e., “limited
building. common property”) contact your insur-
• Discuss the cost of earthquake deductibles with your insurance broker as earth- ance broker for advice regarding your
quake deductibles are typically shown as a percentage of the value of the unit insurance policy and report the
property (which can range from 5% to 20% of the building value) – not the loss to your strata property manager
amount of the loss. or council, as claims may have to be
• Factor the payment of the earthquake deductible into your building’s long-range opened on both policies for repair.
planning. If the damage extends beyond your
• Your strata unit policy should include earthquake coverage as well. It can cover unit to common property (hallways, for
your unit owner’s portion of the building deductible to certain limits. And it would example) or to other units, you may be
also pay for living expenses while you are out of your home. held responsible for those repairs as
well. Your unit policy provides coverage
14 REBOUNDfor losses to your unit, and neighbour- without delay to repair or replace the
ing units or common areas for which damaged property unless the strata When leaks occur in
you would be held responsible. Your corporation has a 3/4 vote within a strata building
unit policy would pay the strata corpo- 60 days to decide not to replace A leak can be particularly damaging in a
ration’s insurance deductible (certain or repair damaged property after strata apartment or townhouse because
restrictions may apply) or repair costs, receiving insurance proceeds paid of the potential for the water to spread
whichever is the lesser amount. This on a claim in respect of the damaged to other units or to the common areas.
could be a significant expense as property. The insurance proceeds are • Know where the water shut-off for your
building-policy deductibles of $25,000 then allocated among “persons with unit is located so that you can shut
are common and can range up to an interest”. Note: section 160 of the your water off yourself should a leak
$100,000 or more. Strata Property Act allows parties to occur, or if you need to call a plumber.
go to court to dispute the 3/4 vote. • The water that comes out of house-
When disaster strikes • The strata corporation can pay for hold taps in Metro Vancouver and
It’s typical for people to adjust to high- a strata corporation’s insurance other parts of B.C. comes from pristine
density living by keeping to themselves. deductible from the contingency mountain reservoirs and is acknowl-
But in an emergency, everyone’s safety reserve fund or by special levy edged to among the best in the world.
and well-being will depend on how pre- without requiring a vote of approval Naturally low in mineral content, the
pared they are, and how well they look by owners. This allows the strata water is characteristically ‘soft’, which
after each other. Start now by bringing corporation to quickly obtain insur- makes household cleaning easier
your fellow strata owners together to ance payouts to repair and replace because less soap, shampoo, and
create an emergency plan. There won’t common property and other assets. detergent are needed. Soft water has
be time or opportunity to do this after • A strata corporation can sue an two considerations for strata residents:
disaster has struck. owner to recover the strata corpora- • First, use less soap so that suds
The Prepared BC Guide for Apart- tion’s insurance deductible, if the don’t temporarily block pipes and
ments, Condos and Townhouses2 owner is responsible for the loss or cause water back-ups.
provides a template. The plan assigns damage that gave rise to the claim. • Second, because soft water is low in
responsibilities for a faster, more mineral content, it’s naturally acidic,
coordinated evacuation of all residents, Learn more which accelerates the corrosion in
especially those who are vulnerable or Strata properties come in an almost pipes. When pin-hole leaks start to
who need extra assistance. It also helps infinite variety of shapes, sizes and become a regular occurrence, get
everyone know the location of emer- complexities. Consequently, there isn’t a professional assessment of the
gency supplies and predetermined safe a one-size-fits-all insurance policy for a building’s piping system. It may be
meeting places. strata property. Nearly all the insur- time for major repiping repairs.
Be sure your building’s emergency ance options for residential properties • If a leak originates in your unit and
system is operational and ready to can come into play: The strata corpora- water spreads to other units or
respond when you need it. Equipment tion’s common property will require common areas, you could be liable
such as elevators, sprinklers, back-up a commercial general liability policy. for the cost of repair. That’s one
generators, fire alarms and smoke de- Strata unit owners need a condo unit- of the many good reasons why it’s
tectors need to be properly maintained owner’s policy, and tenants need their important to have your own insurance
and periodically tested. own policy. Free-standing homes in for your strata unit – whether you live
Business and legal obligations such bare-land stratas are insured by stand- in it or are renting it to tenants.
as paying bills, record-keeping, or provid- ard homeowner’s policies.
ing forms don’t stop when disaster Insurance plays an important role
strikes. Stratas with professional proper- in the health of strata properties and friend, ally and trusted advisor to help
ty managers should discuss emergency- communities because it makes it pos- ensure you have adequate insurance:
response and back-up plans with their sible for owners to be made financially your insurance broker, who often is just
managers. Self-managed stratas should whole again after a loss. You have a right down the street.
arrange for alternates to perform neces-
sary duties, and have offsite back-ups
of key information.
Resources
• BC Strata Housing
After an insured loss http://www2.gov.bc.ca/gov/content/housing-tenancy/
in a strata building strata-housing/operating-a-strata/finances-and-insurance
• Insurance Bureau of Canada
• After a loss or a change in insured
http://www.ibc.ca/bc/home/types-of-coverage/
property and assets, the strata
condominium-or-strata-coverage
corporation, owner or tenant should
immediately contact their insurance • Insurance Brokers Association of BC
brokers. Insurance providers may http://www.bcbroker.ca
also have other requirements for • Condominium Home Owners Association of BC
insurance holders. http://www.choa.bc.ca
• Insurance money must be used
2
https://www2.gov.bc.ca/assets/gov/public-safety-and-emergency-services/emergency-preparedness-response-recovery/embc/preparedbc/preparedbc_apartment_and_condo_guide_web.pdf
REBOUND 15BE READY
EVERY YEAR, SOME B.C. RESIDENTS WILL HAVE TO EVACUATE. It could be as localized
as your own home or strata building in the event of fire or flood, or a larger imminent threat, such as
a wildfire or hazardous-material spill, may cause everyone in your neighbourhood to evacuate.
Every emergency situation is unique, and there is no assurance of how long you’ll have to prepare.
And let’s face it, when faced with such an emergency, we may not necessarily think straight.
1. Have a plan. Develop a plan now so that gency occur when you’re not together.
you don’t have to start from scratch in an Be sure everyone in the family knows
emergency. Involve all family members in what to expect and what to do.
planning for several scenarios: 2. Have supplies and resources at the
• Have an escape plan for getting every- ready. Think about what you’ll need for
one out of the house in the event of fire these scenarios. Make a list and keep
at any time of the day or night. it handy so that you can pull vital items
• Plan how you’ll stay safe at home with- together quickly.
out power, water or services for at least • Keep a small bag packed with a spare set
three days in the event of earthquake. of comfortable clothes and shoes. Have
• Be ready to leave your home quickly by an emergency kit at home with water,
car or on foot to escape an imminent canned food and supplies.
threat. • Know where your important papers
• Plan for your pets, and for connecting (passport, identification, will), computer
with family members should an emer- back-ups and other essential items are
16 REBOUNDto consider seasonal adjust-
ments in your supplies so that 10 things to include in
you are prepared in any month. an emergency kit
Store important documents and Public Safety Canada recom-
irreplaceable personal items mends that you keep a basic
away from flood-prone areas like home emergency kit containing
basements. the following items to help you
3. Leave your home safe. If you are survive a disaster:
under an evacuation order: 1. Water: two litres of water per
• Include in your list of local person, per day (small bottles
emergency contact numbers: are easier to carry in case of
your insurance broker or insur- an evacuation order).
ance company, and BC Hydro 2. Food: Canned food, energy
(1-888-POWERON, 1-888-769- bars and other non-perisha-
3766) for reporting a power bles.
outage. 3. Manual can opener.
• Turn off all unnecessary appli- 4. Flashlight and batteries.
ances, such as air conditioners 5. Battery-powered or wind-up
and hot tubs. radio and extra batteries.
• Unplug sensitive electrical 6. First-aid kit.
equipment and appliances, 7. Special-needs items: Pre-
such as televisions and com- scription medications, infant
puters. formula and equipment for
• Remove food from your people with disabilities. Re-
refrigerator, but only if there’s member to check the expiry
enough time to do so. date of applicable items such
• Turn off all lights except for as medications and infant for-
one exterior light, which will in- mula on an annual basis and
dicate to BC Hydro crews that replace items as necessary.
power is on at the residence. 8. Extra keys for your car and
4. Know where you’re going. Keep house.
cash in small bills on hand and 9. Cash: Include smaller bills and
don’t let your gas gauge go below change; service outlets will be
a quarter tank so that you can operating at reduced capacity
get out of your immediate area and may not be able to accept
without needing to fill up. Keep a credit cards or make change.
map in the car, even if it has GPS. 10. Emergency plan: Include a
hard copy of your emergency
Who will help in an plan and ensure it lists in-town
and out-of-town contacts.
emergency?
Emergencies are managed first at
stored so that you can grab them the local (municipal) level. If the situ- communities through response and
quickly. Have a digital back-up ation escalates, the provincial emer- recovery.
of personal records: insurance gency management structure will be Disaster Financial Assistance (DFA)
declarations, financial records activated. Program: Following a disaster, the
and home inventory list. Your insurance policy: Your home provincial government may declare
• Check your emergency kits insurance also includes coverage for the event eligible for compensation
regularly to ensure that all items additional living expenses in the event from the Disaster Financial Assis-
are usable and ready. Be sure that you are temporarily unable to live tance Program. DFA compensation
in your home due to an insured loss in is available for uninsurable losses in
certain circumstances. five categories: homeowners (principal
What you need to know Emergency Social Services: British residences only), residential tenants,
Go low-tech: The systems that Columbians forced from their homes small business owners, farmers and
you depend on in a normal day by fire, floods, earthquakes or other charitable organizations. Currently
may not be there for you in an emergencies may receive emergency compensation is limited, for each
emergency: Power, water, cell- social services for up to 72 hours. accepted claim, to 80% of the total
phone reception, bank machines, Services may include food, lodging, eligible damage that exceeds $1,000,
public transit. Even 911 (fire, clothing, emotional support, infor- to a maximum of $300,000.
police, ambulance) systems may mation about the crisis, and family Losses of personal property for
be backlogged or hampered by reunification. which insurance was reasonably and
reduced mobility and access. Emergency Management BC: Emer- readily available are not eligible for
gency Management BC will support DFA compensation.
REBOUND 17RECOVER
QUICKLY
Do this now digital files in a safe place, for exam- • Know how your deductible works,
Your ability to recover quickly after a ple, in secure cloud-based storage and have a plan for paying it in the
loss will be greatly enhanced by tak- or with a trusted relative. A thorough event of a loss. For example, your
ing some steps now: inventory will be a great help in filing earthquake deductible is separate
• Make an inventory of all your belong- a claim later. from that of your primary policy. Your
ings. This is easily accomplished by • Surprisingly, many people don’t know insurance broker can answer your
going room to room taking digital the details of their insurance cover- questions.
photos or a video. Take photos inside age, or how to find out. Store your
closets, cupboards and drawers.
Record the make and model of
insurance details along with other
important documents in a safe place
Start the claim
electronics and appliances. Store the as well. process
• Call your insurance representative or
company. Most insurers have a 24-
Take the test hour claims service. Be as detailed
http://safeathome.ca as possible when providing informa-
Fire-safety tips, techniques and product information. Test your home’s tion.
safety with the Safety Quiz. • Ask your insurance broker what
additional living expenses you’re en-
www.basementfloodreduction.com/
titled to and for what period of time.
Is your basement at risk of flooding? Take this quiz.
If it appears that your evacuation
www.iclr.org/homeowners/earthquakerisktool.html order is likely to extend beyond the
A risk-mapping tool provided by the Institute for Catastrophic Loss Reduction. timeframe covered by your insurance
http://www2.gov.bc.ca/gov/content/safety/emergency- policy, talk to your insurance broker.
preparedness-response-recovery/preparedbc/master-of-disaster • List all damaged or destroyed items.
Master of Disaster learning resources and multi-media library for learning Taking photos can be helpful. If pos-
how to prevent or be prepared for B.C. hazards. sible, assemble proofs of purchase,
inventories, receipts and warranties.
18 REBOUNDFollow on Twitter
• @PreparedBC
for preparedness information
• @EmergencyInfoBC for alerts
• @BCGovFireInfo
for wildfire updates
• @DriveBC for road conditions
Up your game
www.firesmartcanada.ca/
• Once you have reported a loss, you
Manuals, videos and articles to help you protect your home from
will be assigned a claims adjuster,
wildfire.
who will investigate the circum-
stances of your loss, examine the http://basementfloodreduction.com/forhomeowners/
documents you provide and explain 20tipsforhomeowners.html
the process. Take notes during the Handbook for Reducing Basement Flooding
conversations and don’t be afraid to www2.gov.bc.ca/gov/content/safety/emergency-preparedness-
ask questions. response-recovery/preparedbc/know-the-risks/floods
• Keep all receipts related to cleanup Up-to-date information on flooding in B.C. Download the PreparedBC:
and living expenses if you’ve been Flood Information for Homeowners and Home Buyers Guide.
displaced. Ask your insurance broker www.shakeoutbc.ca/
about what expenses you may be en- A province-wide drill designed to educate the public in the event of a
titled to and for what period of time. major earthquake.
• You will be provided with a blank www2.gov.bc.ca/gov/content/safety/emergency-preparedness-
Proof of Loss form, in which to list response-recovery/preparedbc/know-the-risks/earthquakes
the property and/or items that have What to do before, during and after a quake. Download the Earthquake
been damaged or destroyed, with and Tsunami Smart Manual.
the corresponding value or cost of www.emergencyinfobc.gov.bc.ca
the damage or loss. You must sign PreparedBC alerts and emergency resources.
and swear that the statements you www.getprepared.gc.ca
make in the Proof of Loss form are Practical information for creating an emergency safety plan for your family.
true. Ask your insurance broker or www.iclr.org/businesses/openforbusinesstm.html
claims adjuster to clarify anything A free business-continuity package.
you are unsure about.
REBOUND 19Your new career
is just around
the corner
Become an Insurance Broker…
· Earn as you learn
· Be a trusted professional
· Help people manage their risk
· Go where you want
· Go as far as you want
Learn more at BCBroker.ca/Careers
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