Calgary experienced yet another bout of severe weather this week, with hailstorms and flash flooding causing extensive damages and power outages throughout the metropolitan area.
Heather Mack, the director of government relations at the Insurance Bureau of Canada, believes that this represents a “new reality” of severe Alberta weather that will require brokers to adapt – and, fortunately, many already have.
“It’s pretty typical right now, as we’re in hail season and Alberta’s Hail Alley is the most active region in Canada for it,” Mack said. “But to have two events like that, one after another, was pretty dramatic. From a distance, the city really looked like it was blanketed with snow, even though it was the middle of summer.”
She says that industry insiders now joke that “there isn’t a roof in Calgary over five years old.” Luckily, brokers and other insurance professionals have risen to the occasion.
“The industry is fantastic because it deals with hail so often, such as last year’s hail storm in Airdrie that caused $568 million in damages,” she said. “We are good at responding, but as we experience warmer temperatures in Canada, we’re going to see even more hail events.”
She particularly credits the industry for exploring unique solutions to control costs. Since 60% of Canada’s total catastrophic events occur in Alberta, brokers have been forced to be strategic in the way they handle claims.
“Claims are going up, which produces cost pressure in the system. There’s the option to raise premiums, but that’s not always feasible, so insurers have had to get creative in looking at the product itself,” Mack said.
Some measures that have been particularly successful include:
- Providing incentives, such as insurance discounts, for policyholders who use resilient materials like rubber shingles on their houses
- Encouraging the use of hail blankets to protect automobiles and coaching clients to shelter their cars when a hail storm is approaching
- Partnering with such organizations as the Institute for Catastrophic Loss Reduction to research better ways of mitigating damages
Finally, more than ever, Mack hopes brokers continue to help their clients navigate the nuances of their home insurance coverage.
“I think with all the changes we’ve seen in the market over the last few years in property insurance, the role of the broker is so important in explaining the differences between policies, and whether or not there are sub-limits or deductibles for wind and hail,” she said.