Peggy Savery plays cards with her husband Lloyd at their new table in a sun-drenched kitchen. The family is still settling into their new home in Port aux Basques, purchased and furnished thanks to a hodgepodge of donations and disaster relief funds.
Their old house, which was destroyed by a storm surge during post-tropical storm Fiona, was covered, he says, and he estimates the family paid their insurance company about $60,000 to protect their most valuable asset.
But when disaster struck last September, all of the Saverys’ claims were denied; Seawater damage was not included in their premiums.
“They didn’t give us a cent,” he said.
The Saverys are among 102 homes in Port aux Basques and surrounding communities that were destroyed by Fiona whose insurance companies refused to pay for damage caused by the storm.
Most were left homeless, with nowhere to turn and forced to rely on government aid to rebuild or buy back their homes. The Newfoundland and Labrador government paid $41 million to Fiona’s victims after a lengthy application and assessment process to fill the gap left by insurers.
Denise Pike Anderson was forced to downsize and move to nearby Cape Ray.
If his insurance had paid, he would have been able to rebuild, he said. Instead, his company told him he needed special surge protection, something almost no insurer currently offers.
“Insurance [companies] “We should be grateful to the government,” he said. “I really think we need stricter laws.”
Ottawa to fund new flood program
According to the Insurance Bureau of Canada, about 1.5 million Canadians live in floodplains or low-lying coastal communities.
Faced with the growing risk of climate change, a group of insurance companies and the federal government are reaching an agreement to offer flood insurance to homeowners in those areas, says Craig Stewart, vice president of the office.
Newfoundlanders who lost their homes to the most powerful storm to make landfall in Atlantic Canada say insurers didn’t pay a dime when their homes were destroyed in September 2022. But one insurance expert says there’s a solution in the horizon for future flood victims.
“Insurance is designed for accidents, and when people live in floodplains or low-lying coastal communities… we know they’re going to flood at some point, and it’s no longer an accident,” Stewart told Breaking:. “That’s why insurance is not a good option and why we’ve been looking for another solution for those people.”
The federal government will underwrite that insurance, with limited premiums available to people in at-risk areas, Stewart said.
“Right now we have essentially two solutions: we have government-backed disaster assistance, which is essentially free insurance paid for by the taxpayer, and then we have an insurance market that will not cover those at high risk,” he said. . “Neither one is optimal.”
Fiona’s wrath in Newfoundland prompted Ottawa to include storm surge coverage in its national flood program, he said, adding that it is expected to be implemented in 2025.
Meanwhile, Peggy Savery has been busy replacing what the family lost, transporting furniture from Stephenville and decorating it with what she salvaged from the rubble Fiona left behind.
These days she’s focused on the future, grateful that the previous owner of her new home offered it to her family at a below-market rate.
Without that act of kindness, he suspects they would have moved away.
“If the insurance company had done what they should have done, it would never have been a problem for us,” he said.
“When you see insurance companies collecting millions and billions of dollars and not paying, it just doesn’t seem fair that the government has to bail us out.”
Download our free CBC news app to sign up to receive automatic alerts from CBC Newfoundland and Labrador. Click here to visit our home page.
