A new flood reality: Why carriers must connect with clients

A new flood reality: Why carriers must connect with clients

A new flood reality: Why carriers must connect with clients Did you know: 43% of Canadians still don’t know if their home coverage includes overland flooding. Maz Moini, vice president of Commercial Lines & Reinsurance at Aviva Canada and speaker at Insurance Business’s upcoming Flood Risk & Insurance MasterClass, explains the multi-pronged approach the carrier is taking to properly educate policyholders.

Click here to learn more about Insurance Business’s upcoming Flood Risk & Insurance MasterClass.

Q1) What are the most common misconceptions homeowners have about their home insurance coverage and what it includes in regards to flood?
 
MM: The most common misconception is the assumption they are already covered under their homeowner policy for overland and sewer backup.
 
Prior to announcing our Overland Water product in 2015, Aviva Canada commissioned a survey that revealed consumers do not understand their current insurance policy for floods.
 
The results highlight a wake-up call to our industry:
  • 43% of polled Canadians did not know if their home insurance would cover them for any overland water damage.
  • 37% incorrectly stated that they were, indeed, covered.
  • Finally, on the coverage provided under sewer back-up, 50% of homeowners were confused as to what is and isn’t covered.
As an industry, we must do a better job of explaining what is covered for water damage in order to educate consumers. 

Q2) Should all homeowners take out overland flood coverage, or is it really just for high-risk regions?
 
MM: As a result of the attention given to the issue in the media, many homeowners are aware of the risks and are becoming increasingly aware that weather-related events are a growing concern for more and more Canadians.
 
Customers who do not live near a body of water are still at risk of flooding. Flooding to personal property may occur from the accumulation or run-off of surface waters, including torrential rainfall when water enters the property.
 
Aviva encourages all customers to look into their water protection coverage to ensure they have the right solution for their property.
 
Q3) What needs to be done on the insurer’s side to effectively educate consumers on flood risk, and market these products to them?
 
MM: A key element of Aviva's marketing and communications for Overland Water was a strong emphasis on customer education.
 
We provide critical information on the risks involved and ways customers can help mitigate their exposure to water-related losses. As part of our marketing efforts, we strive to:
  • Increase awareness of changing weather patterns and increasing frequency of weather-related losses.
  • Clarify coverage against these losses in existing policies.
  • Provide consumers with risk mitigation tactics (e.g. grading, eavestroughs, sump pumps, etc.).
Consumer education is a shared responsibility. More collaboration is required from the industry and all levels of government. We have developed customer brochures and customer FAQs, and have also built a customer microsite on our website dedicated to providing information on Overland Water and other water-related matters.
 
We also use social media to provide some short video tips to customers on how to protect their property from damage due to severe weather, as well as offer the free Plan & Protect app, which was developed in partnership with the Institute for Catastrophic Loss Reduction (ICLR).
 
Q4) What other forms of coverage are available that consumers should be aware of?
 
MM: A number of P&C insurers have announced some form of overland water protection coverage with slight differences in policy coverage. For our Overland Water product, the focus has been to provide a simple, straightforward solution for Canadians.  Our product offers:
  • Full policy limits for Overland Water to ensure coverage is always adequate. 
  • Base deductible of $1,000.
  • First to provide up to $1,000 for post-claim risk mitigation.
  • Simple, easy-to-understand coverage including:
    • Simple coverage options - full policy limits or buy-down of contents amount.
    • Clear definition of overland water - heavy rains, spring run-off or overflow from rivers & lakes.
    • Sewer back-up wording revised to clarify what is/is not covered.
    • Clear underwriting eligibility: no reversed-slope driveways; not located within 100m of a river.
Q5) How is the flood coverage marketplace evolving?
 
MM: Aviva’s overland water protection product is currently available in all provinces across the country. An increasing number of insurers will make overland flood coverage available.
 
We’re currently working with the industry, government, consumers and other stakeholders on how to provide coverage for the 5% of homeowners living in the high-risk zones. 
 
Q6) What needs to be communicated between insurers and brokers to better service flood clients?
 
MM: Our brokers have received training on our Overland Water product, so they can give the best advice to their customers. As our insurance solutions evolve and innovate to meet the needs of customers, our brokers are in-the-know in order to effectively and confidently communicate insurance products to customers.
               
 
RELATED LINKS:
Responding to catastrophic flood: The key challenges
An Australian lesson for Canadian flood insurers
‘Flood is the new fire’ says environmental expert