An escalation of severe weather incidents mixed with aging infrastructure can have a profound impact on people and communities, especially in large urban centres.
While governments are now recognizing this trend and allocating a greater proportion of funds to water and waste infrastructure; these updates this will take time – meaning that insurers need to carry the torch to encourage greater engagement on overland flood risk.
“It is our responsibility to align with customer expectations and offer accessible, flexible coverage options for consumers, where feasible,” says Carolyn Andreacchi, director of personal insurance underwriting at RSA Canada.
“Although there has been an increase in the level of consumer awareness of the risk that climate poses to our personal and financial well-being, we recognize as industry professionals the difficulty consumers face in distinguishing flood exposure potential from sewerage backup,” she says.
Through the use of new data sources and increased capabilities to create pricing sophistication and differentiation, insurers can ensure sustainable product solutions are continuously coming forward into the marketplace.
One such offer is RSA’s comprehensive Waterproof Coverage™, available November 2015. “This coverage offers Personal Insurance clients the convenience of a clear, combined coverage option for sewer backup and overland flood,” says Andreacchi.
The design of this new product has been facilitated by location data, in addition to greater flexibility for sewer backup choices and options through the provision of an ‘a la carte’ approach to the coverage.
“RSA’s Waterproof Coverage was created with brokers in mind,” says Andreacchi. “The product is simple to understand and to explain to customers, and it is easy to introduce from a work flow perspective.”
Risk mitigation an important factor
An available flood coverage offering doesn’t mean brokers should stop beating the drum on mitigation.
“A greater awareness regarding home maintenance is always beneficial in terms of personal risk management,” Andreacchi says, urging brokers to leverage their advisory role, as clients need to “gain a full awareness of the coverage options now available to protect them.
“It would also be beneficial for homeowners to be provided with information at the point of purchase related to the unique vulnerabilities of their potential location,” continues Andreacchi, “whether it is from a flood or aging infrastructure perspective, similar to how clients are advised by community and professional stakeholders when they purchase a home built on previously treated soil or in an air traffic route, etc.”
One source for information can be found online from The Institute for Catastrophic Loss Reduction at iclr.org.
Additional Climate Smart tools can be found at rsabroker.ca/climatesmart
to provide information for consumers on the small actions they can take to reduce the risk of personal property damage.
“Brokers can ensure that their sales dialogues always include an aspect of consumer education with clear coverage choices, explanation of risks, and maintaining documentation regarding consumer’s coverage purchase decisions,” she says. “Brokers have the unique advantage of a local presence that allows them to provide their customers with customized advice to facilitate informed buying decisions.”
By engaging in an ongoing dialogue with insurers, brokers can also share insights into ongoing customer insurance coverage needs. This allows insurers to make product enhancements over time to maintain a sustainable and innovative product suite.
This partnership approach will ultimately lead to a consistently positive customer experience at the point of purchase and in the event of a claim.