Property Claims are on the rise.
Learn what to do when they happen.
This past weekend I had both a friend and a client encountering their first property claims. Water pouring into their basements along with the terrible feeling of not knowing what to do about it.
With more young people buying homes in Nova Scotia....and our weather events getting more extreme, I suspect most policyholders could use some info on what to do with a property claim.
Every insurance claim is unique in its own way, but I can still pull out some BEST PRACTICES to give the people some easy takeaways and maybe some insights to claims they hadn't considered.
Some Advice from a former Claims Adjuster.
1. IT'S YOUR PROPERTY SO LIMIT THE DAMAGES.
If water was pouring into your home, and you DIDN'T have insurance what would you do first?
Probably try to stop the problem right? Yes. Try to stop things from getting worse.
Turn off the water if it's a broken pipe spraying in your living room.
Cover the pot that just burst into flames. (The number of people who make fries on their stove is ASTONISHING to me.) Lift things off the floor that water is moving towards. Use towels/shop vacs...do something to try and stop damages from happening.
These sound obvious, but when people are in a panicked situation sometimes common sense goes out the window.
Buried in the fine print of your policy are 'STATUTORY CONDITIONS'.
These layout requirements for an INSURED (that's you) to at least try and 'mitigate a loss'. That's a fancy way of saying, preventing more damage from happening if you can.
Bottom line here is you can't notice your flooded basement and say
"WOW. Good thing I bought insurance! I'll be at my mom's if you need me."
The worst part about claims is that they often come in bunches. If it's a WINDSTORM, or RAIN EVENT, there's a good chance tons of other people are in the same situation. This means the contractors and adjusters servicing the area are busier than you can even imagine.
In the very moment you NEED one these companies to help you....they are balancing a list of 20 more visits that day, and maybe 200 more in line behind that. Most of the adjusters and Project Managers still provide great service, but often it may not be what a first time claimant is hoping for.
If you call in a claim to your broker, or insurer on a weekend....usually the first person to contact you is from a contractor, or restoration company dispatched by that company. Their priority is to stop the bleeding so to speak. Often they aren't in the position to tell you if there is coverage right away , but they CAN take some steps to temporarily repair damages. Things like patching a roof/or repairing the broken pipe). If you're not handy, this service is a lifesaver regardless of coverage.
3. EXPECT IT TO TAKE A WHILE.
Getting you back to where you were before the incident happened can take some time, so temper your expectations on a quick fix. Claims drag on, and can wear you down if you've not been through them before.
EXAMPLE: A flooded (finished) basement.
It will take a week or more to get it dried out.
Then a week or more to agree on the scope of the damages.
Then who knows how long to collect repair estimates and decide on a contractor.
Then the repairs to be completed.
Replacing, or settling the damaged contents.
AT BEST it's a few weeks. On average a couple months. AT WORST, well let's just hope it's not the worst.
4. DON'T GO AT IT ALONE.
Claims are a whole subset of insurance industry knowledge. It's not something you'll want to just Google when you need it. People who adjust claims, and work in claims departments spend their entire lives immersed in them. They still come across new circumstances every day so believe me when I say two hours on Wikipedia won't have you operating on their level.
You should be able to email, text or call them, and know they'll make time to guide you through the process.
They should be able provide insight on what to expect, follow up with vendors/adjusters when necessary, and give you reassurance that the decisions you're making are in your best interest. It's like taking your own car sales manager with you to buy a new car.
Direct insurance companies are sometimes the lowest price but it's just you and them when it comes to making a claim. I'd be interested to know what the average policy holder leaves on the table or forgets to add to their claim because they had no help through it.
Get a broker BEFORE you have a loss. Once you've made a claim, you're stuck there for awhile until other companies are willing to consider you.
Big day tomorrow as Canada formally legalizes Cannabis!
While you're out celebrating the big change, or hiding from second hand smoke...I'm over here considering the impact on insurance coverage.
*Insurance Nerd Status CONFIRMED if it was ever in question.
Let's bring everyone up to speed on the how this is going to work.
On Wednesday Oct 17th 2018
Canadians over the age of 19 will be allowed to:
*You can possess up to 30 grams, and grow up to 4 plants per household.
Local Municipalities like the City of Halifax, or the Town of (insert any town) get the honor of creating and enforcing bylaws to dictate WHERE you can use it or grow it.
*Shout out to Halifax on their VERY popular choices so far on the new bylaws.
Indoor grow ops and smoke filled bus stops are the future.
Now that people can legally possess this stuff, insurance companies need to revisit how they plan to handle claims related to it.
Here's 4 insurance changes to consider about Cannabis
"Ever read an insurance policy wording....?"
1. Weed just became INSURED CONTENT.
Prior to legalization Mary Jane was always excluded from Property Insurance coverage.
The specific exclusion is often worded something like:
“ILLEGALLY ACQUIRED, KEPT, OR STORED CONTENT”.
Since tomorrow is the big day and it's NOT illegal anymore, insurer's have to switch things up.
Most property policies will see Cannabis moved to the SPECIAL LIMITS section to put a maximum payout on Cannabis at say $500 or $1000.
There is at least ONE insurer who is not limiting Cannabis at all for MEDICINAL users.
Everyone's situation is different, but if you're sitting on a year's supply of the stuff you may want to make sure you're not limited to $250 in coverage.
Worried about Bambi and his crew with the munchies eating your plants?
Maybe put up a fence.
3. Impaired Driving w/Cannabis will be A LOT like Drinking and Driving.
Insurers are rolling these convictions into the same pile as drinking and driving.
If you think Auto Insurance is expensive NOWyou won't want to see how one of these on your record jacks up your rate.
In addition to the fine and probable license suspension...whoever is unlucky enough to get the first of these tickets is probably going to make the news.
The money being spent on "don't drive high" ad campaigns is serious, and I think we can all expect a real focus on it from Police.
4. Building/Content damages CAUSED by GROWING.
This one is interesting.
A COMMON EXCLUSION in most homeowner policies talks about damages caused from using the home to grow marijuana. It often looks something like this:
The old exclusion talks about marijuana directly, and also points to the CONTROLLED DRUGS and SUBSTANCES ACT which USED to have Cannabis listed.
But as of tomorrow, Cannabis will be OUT of the CONTROLLED DRUGS and SUBSTANCES ACT and getting into it's own CANNABIS ACT.
Most insurers have made changes to the language in policy to better explain what they're trying to exclude.
Here's an example of a new one:
On all policies, excluding watercraft, loss or damage to buildings or structures or personal property contained in them is excluded when used in whole or in part for the cultivation, harvesting, processing, manufacture, distribution, or sale of cannabis or any product derived from or containing cannabis, except as allowed by law.
Changes like these lead me to believe that the trend will be for insurer's to be OKAY with the risk that people are growing 4 plants inside their home.
That being said, this is only one company. There are all kinds of property insurers out there including a number of direct markets who don't always follow industry standard.
It's very possible some companies will not have any changes ready for tomorrow or they may have no interest in covering loses due to growing plants indoors.
So if you're planning to grow a few plants indoors, you may want to check with your broker to make sure any damages caused by it would in fact have coverage.
Based on how I'm reading some of these these wordings, optingtogrow a few morethan what'sALLOWED BY LAWcould be enough to deny a claim in some situations.
I have NO DOUBT this will be a contentious issue for years to come for insurers and clients who push the envelope on growing one too many plants.
DON'T BE GREEDY.
YOU GET 4.
That's pretty good and better than yesterday.
There is a real risk in growing plants indoors if you don't take the proper precautions. A lot of heat comes off these high-powered lights. There are often extension cords and exhaust fans, with containers of water sometimes in tight spaces.
Whether you use it medicinally, or just for recreation make sure you're covering your bases and being responsible. If you're going to take a crack at it, do your homework and treat the process with some respect.