Coverage gaps are common, to clients’ surprise

Coverage gaps are common, to clients’ surprise

Coverage gaps are common, to clients’ surprise by APRIL Canada

Millions of first-time homeowners across Canada have what they may think is the right kind of home insurance coverage, but they may occasionally face incidents which challenge those beliefs. The fact of the matter is that many people have coverage gaps when it comes to things for which they might be at risk. As a result, it's important for them to closely examine all their insurance needs, and make sure that their policies keep up with their changing situations whenever possible.

If that kind of coverage need isn't monitored closely, situations like a recent incident in Winnipeg can occur, and cause havoc for homeowners who otherwise might have thought their policies would cover whatever problems might arise. A water main break in the city's St. James neighborhood has one homeowner's property in rather rough shape, according to a report from the CBC. Worse, the break seems to have happened near the homeowner's house itself. His entire property, he says, is a mess.

"The backyard is covered in ice, the side of the house is washed away," David Gunson, the homeowner in question, told the news agency. "The front yard is covered in ice. The garage is basically an ice rink. The basement is soaking wet. [A neighbor] told me it looks like there's water gushing out of your house. It was literally like the Red River – just one big, mad rushing river down the street, out of the house, down the front lawn. Watching it happen and not being able to do anything about it was the worst part."

What happened next?
The water main seems to have burst sometime between 9 and 9:24 p.m., when the neighbor placed the call, but by the time Gunson got home and got through to the city's water and sewer emergency line, it was closer to 10 p.m., the report said. The break was finally discovered around 11:30, but that was close to an hour after the flow had already begun to slow.

In the end, the damage was significant, with water a foot deep in some places, and deep mud elsewhere, the report said. Worse, because of the extent of the damage, home insurance adjusters have not yet determined just how much this is going to cost Gunson in the end, in part because there's still so much ice in the yard that it becomes difficult to assess. For his part, though, he wants the city of Winnipeg to pick up the tab for the deductible and higher future premiums on their existing home insurance either way, though a spokesperson for the city says that it is not liable.

What's the takeaway?
As a result of all this, the importance of having the right home insurance coverage is underscored heavily. While it may not be possible to prepare for every eventuality, any efforts to get as close as possible to that level will probably go a long way for first-time homeowners in particular. That's because they typically don't have as much experience in dealing with these issues as others.

"The most common thing I hear from homeowners with claims is 'but it's not my fault'. Although this is often true, rarely is it someone else's," said Karen Roller, CIP, the underwriting director for April Canada. "This is one of the main reasons why it is so important for home and condo owners, as well as tenants to not only have insurance but to ensure that it is adequate. It's difficult to predict a burst water main, a hail storm, a fallen tree or even most fires and it's even less likely that when it happens someone else can be held responsible. This is the purpose of insurance; to help restore insureds after an unexpected financial hardship. And unfortunately as losses increases so do the premiums that must pay for the losses. Unless an individual has an unlimited cash reserve, they should always ensure that they budget for adequate insurance coverage to assist them through the unforeseen, especially when it comes to the roof over their head."