Government Response to Open Letter

Five days ago I wrote an Open Letter to Rick Fraser, Associate Minister in charge of Recovery and Reconstruction of High River, following the Flood Information Night on July 18, 2013.  Today I received a response, and as promised, I am sharing it with as many people as I can.

The response came to me as a message from an entity who identified itself as "2013 Alberta Floods", so the Associate Minister's input is somewhat questionable, however there are some responses here that many may not have heard before.  My responses follow theirs.

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Thank you for your questions. Please see the answers below.

1) With regards to your questions about disaster recovery funding timeline: 
The Government of Alberta is committed to getting initial disaster financial assistance payments to eligible applicants within seven to fourteen days after they apply. We encourage anyone with flood damage to get their application in as soon as possible by going to a registration centre in person. Every application is different. Some applications can be very straightforward and take only a short time to complete, while other applications can be more complex and take weeks or months due to the extent of damage and repairs required. More information on the disaster recovery program and the location of registration centres is available at http://alberta.ca/2013DisasterRecoveryPrograms.cfm 

2) Regarding insurance complaints:
If you do not agree with the decision made by your insurance adjuster, there are options in place to review the dispute.  You can contact the insurance company’s claim manager to discuss your issue.  Most insurance companies also have an internal ombudsman that you can contact for an additional level of review.  

Following this, if you still have not reached a resolution, you can contact the General Insurance OmbudService (GIO) at http://www.giocanada.org or toll-free at 1-877-225-0446 for assistance.  Another option available is to seek legal counsel. If you are concerned with the conduct of an insurance agent or adjuster you may wish to provide your concerns to the Alberta Insurance Council at 1 800 461 3367. If you are concerned with the conduct of an insurance company, you may contact the office of the Superintendent of Insurance, toll-free in Alberta by first dialing 310-0000, then 780-427-8322. 

3) In regards to the disaster recovery program covering legal costs if an insurance company is found to be at fault:
Overland flooding resulting in water overflowing onto dry land and causing damage is not covered by any home insurance policies in Canada.  However, disaster recovery programs are in place to provide financial assistance for municipalities and their citizens who incur uninsurable loss and damage as a result of a disastrous event such as overland flooding.  Detailed information is available online at http://alberta.ca/2013DisasterRecoveryPrograms.cfm. 

4) In regards to the Alberta government, insurance companies and the IBC:
Our Premier met with members of the insurance industry this week and made it clear that all insurers are expected to honour their contracts with Albertans. With this said, it is important for all consumers to be aware of what is in their policy, and what is and is not covered.

Government does not regulate any standard wording for property insurance contracts nor does it regulate the claims handling process of insurance companies.  Since government does not regulate these things, the specific wording each insurance company uses in its property insurance policies may be different from the wording used in other companies’ policies.  This is why there are differences in property policies and claims handling practices.

Insurance companies price policies in a way that reflects the risks they cover and exclude risks for which they have not priced.  How each company determines the cause of an insured loss is up to them, but this can be challenged either through the claims escalation process, or the courts.

It is important for people to review their own policy wording to understand what is covered and what coverage exclusions may exist.  We encourage you to contact your broker or insurance company if you require further clarification about your policy. The Insurance Bureau of Canada’s Consumer Information Centre is also a good resource for consumers requiring assistance with their insurance questions. You can visit their website at www.ibc.ca, or they can be contacted directly by email at albertaflood@ibc.ca, or by phone at 1-800-377-6378.  

If you do not agree with the decision made by your insurance adjuster, there are options in place to review the dispute.  You can contact the insurance company’s claim manager to discuss your issue. Alternatively, the GIO and Alberta Insurance Council provide additional review (see contact information in response 2 above)

5) Regarding mortgage renewals:
To enable all parties affected by the floods to assess the scope and ramifications of this event on their situation, the Minister of Treasury Board and Finance has asked financial institutions to postpone actions to foreclose on loans until the full impact of the flood and any associated relief programs are in place and operating.

While Government does not have the ability to require financial institutions to renegotiate its mortgages or to postpone any foreclosure actions that may arise as a result of the decision not to renew, it is generally in the best interest of the financial institution and its shareholders to defer action until they can make a determination of the best way to maximize its returns in the near and long term.  

This is not to say that some renewals won’t be for shorter periods or that no foreclosure actions will be taken. Loans that were high risk prior to the flood and, unlikely to get relief, may still be subject to continued action to prevent further erosion of value.  

Neither the financial institution holding the mortgage, the homeowner, nor Albertans generally, will benefit from a wholesale rejection of mortgage renewals in the flood affected areas.  As market stability returns, each affected party will then be able to make the best decision for their circumstances.

In the interim, homeowners who have mortgages coming up for renewal in the short term are advised to communicate directly with their mortgage provider to determine what options are available.

6) With regards to your questions about the flood maps and choice for residents in flood fringe zones and providing standards, benchmarks and guidelines: 
We fully understand these policies come with extensive considerations and, while we don't have all the answers to all the individual situations faced by Albertans today, we're working as quickly as possible with municipalities to finalize the details. Thank you for your patience. 

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Response Number 1 - Actually a direct response to my third question.  A commitment of 1 - 2 weeks is a great commitment, but I'm worried about them negating that commitment with a caveat that it has to be an easy application for that to happen.  Nonetheless, they have provided a commitment many haven't heard yet.

Response Number 2 - A response to a portion of my second question.  This provides a step-by-step process for dealing with your insurance when the dealings aren't going well.  I'm hopeful this helps out considerably.

Response Number 3 - Another response to a different portion of my second question, although it didn't really answer the question.  The short of the long of it, using a lawyer to deal with an insurance company falls outside the realm of the Disaster Relief Programs.  In other words, if you get a lawyer to deal with your insurance, you will cover those costs.

Response Number 4 - Another response to the second question again.  I'm not entirely certain why these details were provided.  It sounds like the Government is quite concerned about homeowners understanding their insurance policies.  I suppose if your insurance policy is not currently floating down the Highwood, this would be sage advise.

Response Number 5 - A direct response to my fourth question.  I'm glad to hear of the Government's involvement in helping out mortgage holders.  I suggest mortgage holders who are having problems with their lenders bring this Government response into the bank with them.

Response Number 6 - A blanket response for my first and fifth questions.  There was no commitment to flood map updates.  Having just heard yet another group of people who need this information (not just Hamptons Hills residents), I'm more convinced than ever that this commitment must be made, and doubly soon.  Further, the lack of attention to the fact that many simply do not have a choice concerns me greatly.  It sounds like little to no consideration of the people falling through the gaping holes of the Disaster Relief Program has been made.

Missing Response - To my sixth and final question, there is still no response about what floodproofing standards would look like.  For us to know how to mitigate our homes and businesses, we need to know these standards.  When Mum is the word, then no work can get done, or any work that does get completed runs the likelihood of having to be redone, and therefore costing the Province to fix it again.

I'm very pleased to see some of the responses that should give some of us a little more direction.  However, there is a little more detailed required, so I will continue pressing Associate Minister Rick Fraser for these details.  I'm sure he will respond very shortly.