Tornado dispute ‘highlights importance of broker’

August 25th, 2019  |  Home Insurance

Having a broker in your corner can mean all the difference when disaster strikes.

No one would know that better than Ottawa-area couple Karen and Mark MacDonald who lost their Craig Henry home after a tornado Sept. 21, 2018.

They told CTV News recently they “went out for pizza one day” and came home to find their house destroyed.

The EF-3 tornado tore a path from Ottawa’s rural Dunrobin neighbourhood across the Ottawa River into Gatineau and other parts of western Quebec, damaging and destroying hundreds of homes, knocking out power and sending six people to hospital. Environment Canada later confirmed there were six tornadoes that day in the region.

$295 million in damage

The Insurance Bureau of Canada (IBC) said the Ottawa-Gatineau tornadoes caused total insured damages of close to $295 million.

But the MacDonalds’ story made headlines because of the huge value of their home. It was eventually levelled in March 2019 and the couple filed a rebuild quote with their insurance company for $1,722,976.

But the insurer disputed the rebuild estimation, instead pegging the rebuild cost at $1,493,649 – almost $300,000 less than what the MacDonalds were asking for.

Mark MacDonald, who is fighting the insurer in court, told CTV this past June: “We paid our insurance, we thought insurance would remove the stress of anything that could possibly happen and instead it has added stress to our lives.” He said the insurer’s rebuild quote doesn’t include his finished basement, garage, pool, landscaping and damaged home contents.

As of June 2019, the MacDonalds’ lot is still vacant in the upscale neighbourhood.

A spokesperson for the insurer, in documents sent to Mark MacDonald, said the company has opted to trigger Appraisal under the Insurance Act.

Value of broker

Brian Irwin, president of the Ottawa Insurance Brokers Association, and advisor and broker at Currey Insurance Agencies, said this situation highlights “the value of the broker.”

Reacting to the CTV News Report, he said: “The value of the broker is paramount. It highlights the benefits of having someone come in and take a look at your house, evaluate your assets and make you aware of any issues, as opposed to buying insurance online in 30 seconds without having much of an idea about what you bought.”

Homeowners should also:

  • Know their policy. What it covers and what it doesn’t. If you aren’t sure, talk to your broker.
  • Carry out regular evaluationsof their home. Take a video recorder through you home every three to five years and videotape everything you have. That makes it easier to claim guaranteed replacement costs on the insurance policy because it makes a strong business case for the insurance company.
  • Keep your broker aware of any changes/updates made to the property. For example, if you finish a basement or add a pool, let your broker know because it increases the value of your home.

“For most people, the biggest investment you’re ever going to make is in your home. As such, you want to make sure that it’s properly insured,” Irwin told Insurance Business. “The issues arising out of the September tornadoes and the MacDonald case are highlighting that, to no end, people really need to be vigilant and take a close look at their insurance policies. No longer can you buy home insurance on price. You have to buy on coverage. “

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