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Residents gripe about insurance confusion in light of flood damage

CALGARY- Homeowners on a street in Elbow Park have found different interpretations of flood damage by different insurance companies.

Tom Carter’s basement on 6th Street S.W. was under five feet of water. He says the water didn’t come in over the ground or through his windows, but rather through his sewer system underground.

However, when he filed a claim for sewer back up it was denied.

“It’s the wording in the policy,” he complains. “They’re saying we’re not covered for obviously overland flooding– which nobody’s covered for– but also for sewer back up that is as a result of overland flooding.”

However, AMA Insurance says there is evidence of overland flooding and sewer back-up in his basement.

His next door neighbor Paul Smith filed a claim for sewer back-up in his basement with a different insurer, and had a much different result.

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“I was told that they would accept the claim and it was a clear case of sewage back up and it was clear no floodwater had touched the house and they accepted the claim,” Smith explains.

People in the industry say interpretation is unfortunately part of a private insurance market.

“Every company will have its own interpretation,” says Ross Bucsis with Palliser Insurance. “They will act according to what they feel is proper protocol. You may encounter different interpretations on the exact same set of circumstances.”

Heather Mack with The Insurance Bureau of Canada says insurers are watching how each other responds to this disaster.

“Throughout all of this there are still competitive market forces at play, and I think that companies are well aware of how they’re perceived by the public, which will have an impact on their future business.”

AMA is reviewing Tom Carter’s claim. Carter says if it’s not reversed, he intends to appeal to the Insurance Ombudsman.

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