Wildfires and Insurance

Frequently Asked Questions

• Can I keep my fridge and freezer?

  Yes, you can keep your fridge and freezer, and continue to use it if it’s safe to do so. Some fridges and freezers may have sustained damage as a result of the prolonged power outage and the resulting food spoilage. However, some may be ok. Check with your insurance representative if you have questions.

  If you need to dispose of your damaged fridge or freezer and you have homeowner’s or tenant’s insurance, start by following these two simple rules:

  • Call your insurer before disposing of your fridge or freezer to notify them and to check your coverage.

  • If you need assistance disposing of your fridge or freezer, check with your insurance representative. They may be able to recommend a service provider to assist you. Ensure that the appliance is removed carefully to avoid causing damage to your floor.

  Here’s what you need to know about your insurance coverage:

  • Your refrigerator, freezer and their contents may be covered for damage related to food spoilage caused by an accidental power interruption. Typically, in this situation, your freezer and its contents are insured for a specified amount. Check your policy.

  • Before disposing of food from your freezer, make a list and take photos of the contents for insurance purposes.

  • If you suspect your fridge or freezer is contaminated by food spoilage or other damage, speak to your insurer before discarding the appliance.

  • If your insurer agrees that the refrigerator or freezer must be replaced, the cost of de-gassing and disposing of the appliance is typically covered under the debris-removal portion of your policy.

• Do I have to view my property to confirm it is damaged before I can start an insurance claim?

  No. If you are under evacuation order, standard home and tenant insurance policies provide additional living expense coverage, which starts the moment you are evacuated. You can start a claim right away, even if you don’t know if your home is damaged or not by wildfire.

• If my vehicle is damaged by wildfire and moved by emergency officials, can I still claim for the damage?

  Yes. Fire damage to vehicles is covered under optional comprehensive or all-perils coverage. Emergency management officials commonly move vehicles off roadways and streets during major incidents, for safety reasons. As long as you have comprehensive or all-perils coverage, you can still claim for vehicle damages, even if your vehicle is moved during the emergency response.

• What does my insurance cover?

  All standard homeowner’s and tenant’s insurance policies cover damage caused by fire. They also include mass evacuation coverages to help with the cost of alternative accommodations and living expenses for people who are prohibited from returning home due to a mandatory evacuation order or because their home is unlivable as a result of insured damage.

  Comprehensive or “all perils” auto insurance policies cover your vehicle for fire damage. While most drivers have this coverage, it is not mandatory, so make sure to check your policy.

• How do I file a claim?

  If you know who your insurance representative is, contact them as soon as it is safe to do so. Otherwise, call your insurance company. If you need any assistance, contact IBC’s Consumer Information Centre at 1-844-2ask-IBC (1-844-227-5422) or email AtlanticCIC@ibc.ca (Atlantic region), AskIBCWest@ibc.ca (Western & Pacific regions), ONCIC@ibc.ca (Ontario).

• What happens when I file a claim?

  When you report a loss to your insurance representative, you will be assigned a claims adjuster. It could take some time for the claims adjuster to contact you, given the number of claims following a wildfire event. But rest assured that you will be contacted. Making sure that your insurance representative has your correct email address and cellphone number will help the claims adjuster reach you.

  The claims adjuster will investigate the circumstances of the loss, examine the documents you provide and explain the claims process. Take notes during these conversations, including whom you spoke with and what date, and speak up if you have questions.

  Your insurance company will ask you to complete a “Proof of Loss” form to list the property and/ or items that have been damaged or destroyed and the value or cost of the damaged or lost items. You will be asked to sign and swear that the statements you make on this form are true.

  If you have any concerns or are uncertain about any aspect of your policy or claim, don’t hesitate to ask your insurance representative or claims adjuster. They are there to help.

• Do I have to pay my insurance deductible and who do I have to pay this to?

  An insurance policy is a contract that has terms, conditions, limits and commonly a deductible. A deductible typically applies to a claim, but in some circumstances, it may not apply to certain portions of coverage. A deductible is usually paid to a contractor, who is completing the repairs to your property, or your deductible would be deducted from any payment that is being provided to you. You do not have to send a cheque to your insurance company directly for your deductible. Check with your adjuster if or when your deductible applies.

• Will my premiums go up as a result of this wildfire?

  As much as prior claims can impact future premiums, the insurance industry is well capitalized for these events. A single wildfire event typically does not automatically impact premiums. There are external factors that are putting pressure on premiums however, like inflation, interest rates, supply chain disruptions and skilled labor shortages. The insurance industry works hard to ensure premiums remain stable. Remember that you can customize your insurance policy to fit your needs and speak to your insurance representative about options that are available.

• Will a landlord’s policy cover uninsured tenants?

  No. A landlord insures only the building and in some cases the appliances. The personal property of tenants is theirs to insure on their own.

• Are “acts of God” excluded from insurance policies?

  Contrary to popular belief, there is no such thing as an “act of God” exclusion in any property insurance policy in Canada. Insurers often pay for damage resulting from natural disasters, including windstorms, rain, hail and wildfires.

• I’ve heard that my claim may be denied if I don’t file it right away. Is this true?

  No. The main reason for getting the claims process started as soon as you can is so you can be reimbursed as soon as possible.

  Generally, claims related to the damage of personal insured property that is insured must be reported within two years from becoming aware of the damage or loss. For business property claims, owners should speak with their insurance representative.

• If the cause of the wildfire is unknown, does my insurance still cover the damage?

  Yes, your home and business insurance policy will cover damage from fire, regardless of the source or cause of the fire, unless you caused the fire intentionally.

• Can I do some of my own cleanup?

  After fire damage, you should not enter your home until emergency officials say it is safe to do so. Don’t turn on any electrical switches until the electrical system has been checked by a professional.

  Once authorities say it’s safe to begin cleanup, take all of the proper precautions to protect yourself. Your adjuster may advise that you to use a professional cleaning service if the damage is extensive.

• How much will I be covered for?

  Your coverage depends on your policy. Check with your insurance representative.

  Typically, a homeowner’s policy offers replacement cost coverage up to the limit specified in the policy. Or, if a policy is for guaranteed replacement cost coverage, the insurer pays whatever it costs to repair or replace your dwelling and other structures, even if it exceeds the policy limits. Most policies contain a “same site” requirement for guaranteed replacement cost coverage that requires that the home must be rebuilt where it was.

• Is the removal of fire retardant covered?

  Residents who return home following evacuations, or anyone with an insured home or business, may find that their property has been affected by fire retardant used in wildfire suppression.

  Most homeowner’s and business insurance policies will cover the costs related to the removal of fire retardant from the exterior of buildings. Please contact your insurance company representative to determine the exact nature of your coverage.

• What if I don’t rebuild on the same site?

  Typically, if the home is not rebuilt on the site where it was before the loss, your policy would cover you for your home’s actual cash value (depreciated value). Check your policy for details.

• Does insurance cover the value of the land?

  Your policy insures your home, other structures and personal property, such as furniture and electronics (plus any extensions and your personal liability). It does not insure the land. If you decide to take a cash settlement, you still own the land.

• What if I have a mortgage and want to take a cash settlement?

  If there is a mortgage lender listed on your policy, such as a bank, the lender is entitled to the outstanding mortgage amount for the home. Lenders are protected under a Standard Mortgage Clause in your policy.

  If, for example, the home is totally destroyed and the policy has a $450,000 limit and there was an outstanding mortgage debt of $450,000, the bank would get the $450,000. But if the property was insured for only $350,000 and $450,000 was owed on the mortgage, the bank would get the $350,000 and the homeowner would owe the $100,000 balance of the mortgage to the bank. Of course, the land is still the homeowner’s to sell.

  • The intent of insurance is to help people recover from the unexpected property losses. It is not intended to cover mortgage payments after a loss or to cover an outstanding mortgage on a home.

  • Home insurance is designed to cover the costs associated with rebuilding a home and the costs of replacing its contents.

  • Homeowners whose dwellings have been destroyed by fire will still owe their lender the outstanding balance on their mortgage.

  • The insurer will make the claims payment jointly in the name(s) of the insured(s) and the mortgage lender.

  • If the homeowner chooses to rebuild the home on the same site, the limit of insurance or full replacement cost applies. Any outstanding mortgage would continue to be in place, and the homeowner would be effectively returned to the same financial position that they were in prior to the catastrophe.

• Can you explain how cash settlements work?

  Insurance is intended to put you back in the position you were in prior to the loss. Alternatively, home insurance policies can provide cash settlements. There are financial implications associated with accepting a cash settlement. Policyholders considering cash settlements should weigh the financial aspects carefully to make the best choice.

  In the event of a catastrophic event, such as a wildfire that destroys their home, an insured homeowner has the option of:

  • Rebuilding the home on the same site, or

  • Taking the depreciated actual cash value (ACV) of the home which they might use to build or buy a home elsewhere.

  There are several factors to consider when choosing whether or not to accept a cash settlement, such as:

  • The full replacement cost of the home versus its depreciated ACV;

  • The outstanding value of a mortgage on the property, if any; and

  • The market value of the home and land.

  If the homeowner chooses to take the ACV of the home and rebuild or invest those funds elsewhere, the homeowner also needs to consider the amount of any outstanding mortgage.

  • If there is an outstanding mortgage on the property, then lenders, such as your financial institution, are protected under the Standard Mortgage Clause. If there is a mortgage lender listed on a home insurance policy, the mortgage lender is entitled to recover from the insurer up to the outstanding mortgage amount.

  • In a situation where a property was insured for less than the outstanding mortgage balance, the homeowner would still owe the balance. Of course, the land where the home stood still belongs to the homeowner and can be sold to help pay off the outstanding mortgage.

  The decision by an insured homeowner to take the ACV of the home instead of rebuilding on the same site is a personal financial decision. Speak to your insurance representative to ensure you understand the settlement you have selected.

• Does a Provincial State of Emergency mean no one in the province can obtain a new insurance policy?

  No. If a “State of Emergency” is declared by the province, only areas that are under imminent threat are commonly subject to temporary restrictions or limitations on the sale of new insurance coverage.

  It is important to note that renewals of insurance policies are not affected by the wildfires.

• What do I do if I want to, or am in the process of, purchasing a new home in an area under imminent threat?

  • Consider adding a conditional ‘subject to property insurance’ clause in the offer

  • See if you can delay the possession date, until the threat passes and coverage can be placed on the policy

  • Shop around. Different insurers have different limitations and/or restrictions for properties in threatened areas

  • Ask your broker or agent what options may be available to secure insurance for the home

  • Ask if you can add the new home to your existing policy instead of trying to secure a new insurance policy with a different provider.

  If you are in the process of selling a home, do not cancel coverage until the closing or possession date.

• Is property insurance available for dwellings and recreational properties that have limited access or water access only?

  Yes. Such coverage is available through most home insurers, as well as specialty insurers. This includes coverage for fires.

  One thing to keep in mind is that when setting premiums for property coverage, insurers consider the availability of and distance from public fire protection such as fire services and firefighting water sources. More remote properties are generally more costly to insure.

• If I have wildfire damage to my home, who chooses the contractor to complete any necessary repairs?

  Many insurers have established relationships with fire and smoke remediation contractors and can vouch for their reliability and the quality of their work. Many insurers also guarantee the work of service providers they recommend. However, you are not obligated to use a company recommended by your insurer. You can use the service provider of your choice for the necessary repairs to your property.

• If I am evacuated and my home is vandalised or broken into, do I still have coverage?

  Yes. Your home or tenant insurance policy continues to be in force, while you are temporarily evacuated. Even insurance renewals commonly take place during a major wildfire event. Most home and tenant insurance policies cover damage from vandalism or theft, so rest assured your insurance company will assist you if you return home and find damage to your property.

Business Specific FAQs

• How does business insurance work?

  Business insurance policies can differ significantly. However, virtually all business insurance policies cover damage due to wildfire.

  Property insurance for businesses is designed to protect the physical assets of a business against loss and/or damage from a broad range of causes. There are two basic policy types:

  1. Named perils – covers only loss and/or damage caused by perils specifically listed in the policy. Loss and/or damage caused by any other peril is not covered.

  2. Comprehensive – covers loss and/or damage caused by any peril, unless specifically excluded.

• What is business interruption (BI) coverage?

  BI coverage is typically an add-on to an existing business property insurance policy. In the event of a business temporarily needing to shut down, BI covers continuing expenses or replaces lost profits.

  There are three types of BI policies:

  1. Gross earnings policy, which pays only until property or damage is replaced or repaired, or stock is replaced

  2. Profits form policy, which continues to pay until a business resumes its normal, pre-interruption level (subject to policy limits)

  3. Extra expense policy, which is designed for businesses that can remain operational during periods affected by loss and/or damage.

• How does BI insurance work?

  BI policies are not standardized and can include significant differences in terms, conditions and scope of coverage , but most contain language indicating that the insurer will pay for the actual loss of “business income” due to the “necessary suspension” of operations during “the period of restoration.”

  A number of concepts and nuances come into play, including:

  • Physical damage requirement: Most policies require proof that the insured premises sustained physical damage (for example from fire, heat, flooding or firefighting efforts) that is covered under the policy, causing an interruption that resulted in a loss of business income. A business that is interrupted due to the loss of data or a loss of utilities may not have sustained a physical loss. (There is separate utility loss coverage.) Smoke damage could likely qualify as physical damage caused by a covered loss. Most policies would require proof that the presence of ash and smoke resulted in a BI that caused a loss of income.

  • Period of restoration: If BI coverage is triggered, a significant issue is defining the period of indemnity or, as some policies refer to it, the period of restoration. Most policies will pay business income loss, subject to potential limits and conditions, through to the point that the business is restored or when the coverage expires (usually 12 months from the beginning of the interruption).

• Is an evacuation covered under BI?

  A business that lost income solely because access was denied due to a mandatory evacuation order may be able to claim civil authority coverage, which is separate and apart from BI coverage. If civil authority coverage is available, it will typically be offered if an insured affected by a mandatory evacuation can establish the:

  • Issuance of the qualifying order and that it prohibited access to the covered premises; and

  • The order caused a business loss.

  Some policies state that the coverage applies only if the order is issued with respect to adjacent property or property within a certain geographical radius of an insured location. Some policies state that the indemnity period begins 72 hours after the issuance of the order and extends for a period of weeks (usually three or four weeks) but seldom for a period beyond that. The coverage terminates when the civil authority lifts its evacuation order or the limits have been exhausted – whichever comes first.

• Are businesses outside of the fire zone that experienced a disruption in their business covered for BI?

  Generally a reduction in customers related to an insurable disruption which results in reduced profits would be covered under a BI policy, subject to the terms of the policy.

  Additionally, the BC wildfires may have disrupted the supply chains of businesses outside of the fire zone. Some businesses may have contingent BI coverage (CBI), or “dependent business coverage” for economic losses caused by property damage to a supplier’s premises or for a supplier shutdown due to an evacuation order.

• What is the difference between limited and extended indemnity?

  The indemnity period is the time period covered for loss of business. There are two basic forms of BI indemnities:

  1. Limited (or earnings). This policy pays only until the damage is repaired or the property is replaced. As soon as the business resumes, the policy stops paying even if the business hasn’t regained its previous level of earnings.

  2. Extended (or profits). This coverage continues to pay until a business resumes its normal, pre-interruption level subject to the maximum period of indemnity listed in the policy.

Filing an insurance claim

• STEP 1. Document everything

  When it’s safe to do so, make a complete list of all damaged, destroyed or lost items. Remember these tips:

  • If possible, attach proofs of purchase, receipts, police reports, owner’s manuals and warranties for lost or damaged items.

  • Take photos of any damaged or destroyed items. Review your files for photos of any lost items.

  • Keep notes and be as detailed as possible when documenting damage and providing information.

  • Keep ruined items unless they are dangerous or pose a health hazard.

  • Keep all receipts related to cleanup.

  • Review and update your home inventory list after you experience a loss.

• STEP 2. Contact your insurance representative

  While you legally have two years from the date of the incident, it’s recommended that you report an accident or claim to your insurance representative and provide complete, accurate details as soon as possible following a theft, accident or property damage. Most insurance companies have a 24-hour claims service.

  Here are some things to keep in mind:

  • Always keep your insurer’s contact information handy.

  • Be as detailed as possible regarding the circumstances of the loss and any subsequent damage.

  • In the event your home is unfit to live in, ask your insurer about the Additional Living Expenses (ALE) that are covered under your policy and what the limit is.

  • Most personal property insurance policies (homeowner, condominium unit owner and tenant) cover the cost of alternate accommodations and living expenses for people whose home has become unliveable after an insured loss. There may also be limited coverage for mass evacuation under certain circumstances. This is typically called Coverage D - Additional Living Expenses or ALE in an insurance policy.

  • ALE covers anything over and above your normal expenses. For example, if your temporary accommodations doesn’t have laundry facilities and you have to use a laundromat, those expenses may also qualify. However, ALE does not cover all of your living expenses while you are displaced; it covers your increased cost of living as a result of being displaced.

  • Keep all receipts and invoices for additional living expenses following your loss.

  • Remember that your insurance representative is your advocate when bad things happen.

  • After filing your claim with your insurance representative or directly with your Insurer, a claims specialist or adjuster will contact you. They will investigate the loss circumstances, examine the documents you provide and explain the next steps.

• STEP 3. File a proof of loss if requested

  When you file your claim, your insurance company will ask you to complete a “proof of loss” form. This form lists all damaged or lost property or items with the value or cost of the damage or loss.

  You must sign and swear the statements you make are true. If any of the statements are untrue, your insurance may be voided.

  Typically, a proof of loss must be completed and returned to your insurance company within 30 days. Your insurance representative or claims adjuster can answer any specific questions you might have.

• STEP 1. Document everything

  Things can change rapidly and unexpectedly in the aftermath of a collision or if your car has been damaged. This is why taking photos and making a detailed record at the scene of an event is so important.

  Once it’s safe to do so at the site of a collision you and any other driver(s) involved should both take photos and immediately document:

  • date, time and specific location where the event occurred

  • drivers’ names, addresses, phone numbers, drivers’ license numbers, vehicle registration and insurance information

  • contact information for anyone who is injured or potentially injured, involved in the incident or a witness

  • all details about any injuries, potential injuries or property damage

  • specific information about the collision or incident – how it happened, speed, weather and road conditions and anything else you think may be important

  • if witnesses are available, their description(s) of the collision or incident – what happened before, during and immediately after

  • if a police officer attends the scene, note their name and badge number

• STEP 2. Contact your insurance representative

  With the appropriate coverage in place, your insurance provider will support you in a number of ways.

  • They’ll authorize repairs to your vehicle if it is damaged and repairable. Your insurer may suggest repairs be carried out by their preferred shop(s) to ensure they can confirm the quality of the work.

  • If damage is major and cannot be repaired safely, or the cost of repairs is more than the value of your car before it was damaged, your insurer may declare it a “total loss”. This means the car will not be repaired and your insurer will provide you with a settlement.

  • If you’re injured, you may be entitled to benefits. They’ll provide claim forms for accident benefits and help you through the process.

Additional living expenses

• When is ALE triggered?

  Each situation is unique, but there are several categories of claims that fall under ALE.

  When an event like wildfire triggers insurance coverage, it is crucial that policyholders discuss their specific circumstances with their insurer so they are aware of when this comes into play.

• My insurer says I can go home, but I don’t think it’s safe. Can I still get ALE?

  When an evacuation order is lifted, prohibited access coverage ends. If your home is not damaged and the governing authority has given an all clear to return but you choose not to, you will not be eligible for further ALE. If there are extenuating circumstances, you should contact your insurer.

• What is a reasonable length of time to wait for insurance companies to reimburse us for living expenses?

  Reimbursement periods vary from insurer to insurer; however, insurance companies understand that homeowners need to pay their expenses. Keep all your receipts and speak with your adjuster about what to expect regarding the timing and frequency of reimbursement. In some instances, your insurer may even provide an advance on ALE.

• What does ALE cover?

  ALE covers the increased cost of living as a result of being displaced, such as hotel accommodations and anything else over and above normal living expenses. For example, if your temporary accommodations didn’t have a kitchen and you had to eat in restaurants, those meals expenses would be typically covered.

Landlord and Tenant issues and questions

• How long does a landlord have to repair a damaged rental unit?

  There is no set period for a landlord to repair a rental unit, it depends on the extent of the damage. However, landlords should attempt to repair the unit within a reasonable time.

• My belongings were damaged. Who is responsible for cleaning, fixing or replacing them?

  Tenants are responsible for their belongings. If you have tenant’s insurance, your insurer will cover any loss or damage to your personal property. Read your policy closely to see what kind of damage is covered and call your insurer with any questions.

• Who is responsible for covering the cost of additional living expenses?

  Tenants are responsible for the cost of additional living expenses unless otherwise stated in the rental agreement. If you have tenant’s insurance, read your policy closely to see if you have coverage for additional living expenses and call your insurer with any questions.

Choosing a contractor

• How does a vendor become “preferred” by the insurance companies?

  Do they base their choices on pricing or on quality of work? Each insurer will have its own vetting process to decide which vendors to include on its “preferred” list. Insurers usually base their choices on a combination of several factors including reputation, experience, qualifications, quality, capabilities and size.

• What should I do if I’m not satisfied with the contractor’s work?

  The first step is to talk to the contractor. The contractor will usually be willing to rectify any deficient work and make things right.

  Many insurers guarantee the quality of work done by their preferred contractors. If you are using your insurer’s contractor, and speaking to the contractor doesn’t rectify the problem, your next step is to speak to the adjuster assigned by your insurer to outline your concerns. Each insurer has an internal escalation process to address these types of issues. In extreme circumstances, you may want to refer to your province’s formal dispute resolution process.

• A contractor performed some testing of my home and gave me some alarming results (for example: air quality testing). What should I do?

  You can use the service provider of your choice, however, before any work is undertaken, ensure that any service provider is properly licensed, accredited, trained and insured. You should also check with your insurance provider to make sure that any costs associated with repairs or sampling would be covered by your insurance policy. Be wary of service providers that may not be following Canadian regulatory standards, or who are not appropriately qualified and trained. As a best practice, you should review your insurance policy and get familiar with the coverage it provides.

  Many insurers have established relationships with fire and smoke remediation contractors and other expert professionals and can vouch for their reliability and quality of work. If required, your insurance provider is the best positioned to recommend a service provider to complete any necessary testing or remediation, to ensure your property is repaired appropriately.

Insurance dispute resolution

• STEP 1. Speak with your insurance representative

  • Ask your broker, agent, company representative or claims adjuster for an explanation. Insurance policies are legal contracts that specify the rights and responsibilities of both parties – sometimes misunderstandings can occur.

  • If you have further questions that your representative or adjuster is unable to answer, ask to speak with the claims manager or supervisor.

  • Consider contacting IBC’s Consumer Information Centre at 1-844-227-5422. Our independent staff have years of insurance experience and can answer general questions about:

    • policy wordings and coverage

    • how insurance companies handle claims

    • buying, renewing or updating insurance coverage

    • how to proceed with a complaint

  • Please note that our Consumer Information Centre is unable to provide legal advice.

• STEP 2. Contact your insurance company’s ombudsman

  All licensed insurers have their own internal dispute resolution process. Ask your insurance representative for your reinsurer’s or ombudsman’s contact information.

  When you make a complaint:

  • clearly state your concern and expectations

  • have all pertinent information and documentation available

  • allow time for your insurer to investigate and answer your complaint

  • make sure you keep a record of the people you talked to and what was said

• STEP 3. Contact the General Insurance OmbudService (GIO)

  Inquiries can also be directed to the General Insurance OmbudService (GIO) at 1-877-225-0446 or giocanada.org

  If your matter is not resolved with your insurer’s complaints liaison officer, request a final position letter and contact GIO. The GIO is an independent consumer dispute-resolution system for the insurance industry. Its members include most federally licensed and several provincially incorporated insurers. GIO helps you and your insurer resolve differences about claims-related matters and interpretation of policy coverage in a fair, independent and impartial environment.

• STEP 4. Contact a federal, provincial or territorial Superintendent of Insurance

  If your dispute is not resolved by GIO or if your insurer is not a member of GIO, get in touch with a Superintendent of Insurance in your province.

  Federal Government of Canada

  Part of the role of the Financial Consumer Agency of Canada (FCAC) is to ensure that financial institutions have a complaint-handling process in place. If you have difficulty finding out about your institution’s complaint-handling process or if you’re experiencing delays when using it, contact FCAC. However, please keep in mind that FCAC does not provide redress or compensation and cannot get involved in individual disputes.

  FCAC can be reached at: https://www.canada.ca/en/financial-consumer-agency/services/complaints.html or or 1-866-461-3222