How one insurance company went where others didn't, and provided storm surge coverage

As many Atlantic Canadians found to their dismay following devastation from post-tropical storm Fiona, most insurance companies don't provide coverage for storm surge, but Cooperators Insurance does.

The company wanted to find a solution after its experience of floods in Calgary and Toronto in 2013, executive vice-president Lisa Guglietti told Island Morning host Laura Chapin, because it found existing water damage coverage was both difficult for clients to understand and for adjusters to assess.

Coverage was dependent on where the water came from, and that wasn't always easy to determine.

"It was really clear for us coming out of the 2013 floods in both Calgary and Toronto that we needed to provide a better solution for Canadian homeowners," said Guglietti.

It took five years for the company to come up with a partial solution, and another two for the coverage to be made available for all Canadians.

The coverage is called comprehensive water. It covers damage from water no matter where it comes from. That includes storm surge, which other insurers will not cover because the risk is considered too high and, with climate change, too unpredictable.

Premiums specific to property

The solution Cooperators developed involves getting into much more detail than is typical for property insurance.

"It really does get into the specifics of a property. Our model actually gets into things like exact coordinates of where a home is located, the longitude and latitude, it looks at things like elevation, proximity to water, soil type, so it's very specific to the risk," said Guglietti.

"If you live in a high-risk zone, your premium is going to be higher."

Because the risk can be high, so too can be the premiums, which can be priced at thousands of dollars a year. Those in lower-risk areas may pay only a few hundred.

The company began offering water comprehensive in Alberta in 2015, and then started rolling it out across the country. Residents of Atlantic Canada and British Columbia had to wait until 2018 for the company to develop the models for coastal properties.

About 60 per cent of the company's Atlantic Canadian customers have purchased water comprehensive, Guglietti said.

The biggest challenge in providing the coverage is that models must look ahead into a future made more uncertain by climate change, she said.

The models are constantly being updated with new information from every storm, as well as from new research into how the climate in various parts of Canada is changing.