3

Calgarians upset over denied sewer backup insurance claims following floods


 

CALGARY – Some homeowners are banding together in an attempt to name and shame insurance companies that have rejected their claims for sewer backup damage following recent floods.

Residents of the Elbow Park neighbourhood in Calgary say some insurance companies are approving claims while others are not — despite similar policy wording.

That just doesn’t make sense to Tom Carter, who is exhausted after spending the last week gutting his finished basement of contents that were ruined by two metres of smelly sewer water.

“It is disappointing. I was sick to my stomach. You think you are covered and then you find out that you are not,” Carter said Tuesday after his claim was rejected by AMA Insurance.

“The houses on either side of us are covered through other companies.”

Carter, his wife Julia and two sons now must manage without their living room, spare bedroom, furnace, washer and dryer, TV and the children’s toys. The basement also needs structural and electrical repairs.

The inconsistency in insurance assessments is making people angry and frustrated, he said.

They wonder why an insurance adjuster from one company approves a claim for sewer backup in one home, while another adjuster from another company says no in a house next door, blaming the sewer backup on flooding?

Some people whose claims have been rejected have put up signs on their property chiding their insurance companies for not stepping up to help them.

Two that have been singled out for denying claims include AMA Insurance and RBC Insurance.

Troy Bourassa, director of claims for AMA Insurance, said it all comes down to the precise wording of a policy.

“Each insurer has different language that responds to sewer backup and our particular language is very clear,” he said.

“Ours excludes damage caused by flood and excludes sewer back up damage when that sewer back up was caused directly or indirectly by flood.”

Bourassa said the quick ruling by the adjuster will help Carter, because it will provide him with paperwork he will need to file a disaster recovery claim with the Alberta government.

A message seeking comment from RBC Insurance was not returned.

Steve Kee, a spokesman for the Insurance Bureau of Canada, said such disputes are strictly between policyholders and their insurance companies.

He said every policy and house is different. It’s up to trained professionals to make the call.

“These are sewer backup situations. Adjusters are going to determine what the situation is,” Kee said.

Paul Smith, Carter’s neighbour, said the insurance industry is going to suffer a public-relations black eye if it doesn’t sort the mess out.

Smith, whose insurance claim was approved by Aviva Canada, said it is incredible that companies can treat people differently when they’ve all suffered property losses under the same circumstances.

“I think it is an unacceptable position for the insurance industry to find themselves in, and if the insurance companies are not very careful, they are going to find themselves in a very prolonged public-relations campaign,” said Smith, who is chief financial officer of Calgary-based Talisman Energy.

“I think insurance companies should reflect and look at some of their competitors who are taking the high road and ruling on the side of the insured rather than on the side of small print.”

People who have uninsured property damage can apply to the Alberta government for disaster recovery money to make some household repairs and to replace some essential items, but there are restrictions on what people can claim.

Joanne Aime, another Elbow Park resident, is upset with RBC Insurance for denying her claim.

Aime said it is great that RBC has donated money to Alberta flood relief and that some company employees have volunteered to help during the crisis, but that isn’t what she needs from the company.

“When we purchased our insurance from RBC, we trusted them as a company that would do the right thing in a situation such as this,” she said. “To get a blanket denial for our claim left us both surprised and deeply disappointed.”

Carter said he believes some insurance companies are counting on governments and taxpayers to pick up the tab for some claims that really should be covered by insurance.

He said he hopes to appeal the rejection of his claim with AMA Insurance, but has been told he must wait until company managers return from vacation later this month.

The Alberta government regulates the insurance industry in the province, but doesn’t get directly involved in adjudicating disputes between consumers and private businesses.

Chris Bourdeau, a spokesman with Alberta Finance, said a dispute can be appealed to a national body called the General Insurance Ombudservice.

He said the government expects companies to honour their contacts and hopes they keep the best interests of their clients in mind, especially in light of the recent devastation suffered by people in southern Alberta.

“We are seeing many Albertans and Alberta companies really step up and go that extra mile to help their neighbours, their friends, their communities, their clients deal with this incredible situation we have down there,” he said. “The insurance industry is no different.”

— By John Cotter in Edmonton


 
Filed under:

Calgarians upset over denied sewer backup insurance claims following floods

  1. Insurance companies deny claims as a matter of course. It’s SOP for them. Pity all our elected politicians are useless when it comes to protecting the interests of their constituents. That’s because their true and only constituents are big business.

  2. I am with AMA and cannot get an answer from them, I reported my loss on June 21 and was told I wasn’t covered. An adjuster has been out but said it will be at least two weeks after I filed my claim before I will hear anything back. I am shocked at the behaviour of AMA and I feel no sense from them of any understanding of the stress levels that Alberta resident’s are suffering given the situation in our city. All of my neighbours have heard back and are covered but they were sensible and did not go with RBC or AMA. Please contact your MLA and Jason Kenney regarding these insurance companies behaviour. Who gets to stay on vacation while a large number of your customers are experiencing this type of stress in their lives are looking to their insurance companies to do the right thing? I hope not but I would not be surprised if this does not end up in a class action suit against these companies.

  3. Is Aviva still supporting Smith’s claim? Aviva needed 5 days to get an adjuster to my place which had damage to 2feet on main floor. They took the long weekend off & left me hanging. They suggested I mitigate in the meantime. The sludge left in y house was about 4″. They finally approved my claim & started tearing apart the house. They have now backtracked. Their adjuster said there was sewer backup on 2 floors. The house has no basement windows and was barricaded from the flood. The backup was so powerful it raised the bolts on the upstairs toilets. They are now offering coverage for basement only. I was not given a description in the policy of sewer back up. Just the $60 fee. No kudos for Aviva.

Sign in to comment.