Insurance bureau warns Toronto flood claims will be high

If history is any guide, the 95 millimetres or so of rain that hit the city of Toronto Monday like an exploding water balloon will wind up being a costly affair.

Hundreds if not thousands of residents in the country’s largest city have been left with flooded basements and waterlogged vehicles in the aftermath of the near-record rainfall.

“I’ve been in the business for 25 years, and this would probably parallel the biggest that I’ve ever seen,” Ken Robinson, chief executive of Paul Davis Systems, a big restoration company insurance firms use to repair flooded homes.

“We’ve had some big storms in the past but this is probably one of the biggest I’ve seen,” Robinson said.

Toronto has been walloped with several major storms in recent years, but none packed the kind of punch like the downpour delivered Monday afternoon and evening. The city proper was doused with 97 millimeters while some outlying zones, like areas around Pearson International Airport, absorbed more than 125mm.

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That puts the event on a comparable trajectory in terms of insurance losses to the wind and rainstorms that battered southwestern Ontario in 2005 (150mm) – a storm which stands as the third most expensive event in at least the last 20 years, with insured losses topping $711 million (dollars adjusted for inflation), according to the Insurance Bureau of Canada.

Moreover, Pete Karageorgos, Ontario manager of consumer and industry relations for the IBC said Monday’s sudden downpour could in fact “exceed” the 2005 storm. “It’s still too early to have any numbers, but given what I’ve seen and heard, I suspect this is maybe higher,” he said.

The reason — much of the water damage to homes is from sewer backups, he said, which are covered by many insurance policies.

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“Another point is cars. Not just on the home insurance side, but the auto side there’s going to be some serious claims involved,” Karageorgos added. “But there’s likely been more basements affected than vehicles.”

Robinson said much of the calls Paul Davis Systems began fielding just after the worst of the Toronto storm ceased around 7 p.m. ET were for sewage backup, which is covered, rather than overland flooding which policies don’t include.

“This will primarily be covered under the sewer backup portion of the policy if [flood victims] have that coverage,” Robinson said, though he added, “some companies do put policy limits on that.”
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Franke James hopes it doesn’t come to that.

Sloshing around in rubber boots while trying to drain her basement of four inches of water at her Avenue and Lawrence home in mid-town Toronto, James, an artist and author, is avoiding calling the insurance company.

“The problem is we have a very high deductible,” James said, noting she and her husband had to pay about $2,500 before other expenses would be paid for by her policy in 2005.

“We won’t know until everything dries out. But if the walls have to be redone and the treadmills need to be replaced, it’s worth claiming,” James said.

“This is not the first time this has flooded,” she added. “The reality is, we live in a flood zone. We’re on a hill, and they dug down the basement below the water table. So we have issues with water.”

Toronto resident and author Franke James’ flooded basement at her home in mid-town Toronto.
Toronto resident and author Franke James’ flooded basement at her home in mid-town Toronto. Courtesy, Franke James

Back at Paul Davis Systems, Robinson said he has about 30 crews of two to three repair workers working across the Greater Toronto Area in the aftermath of the storm. Additional support is being called in from Ottawa and other regions – some back from assistance efforts in Calgary.

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“The intensity of storms is greater than when I started my career,” Robinson said. “What we saw in the past was a steady flow of claims of standard work — a kitchen fire, a little flood with some more pronounced work during a storm event. “But it wasn’t this type of situation. Now we deal with slower times then massive events with hundreds and hundreds of claims all at once.”

The reason behind the changes, like perhaps climate change, Robinson didn’t bother speculating about. But he added, “I’m sure the insurance companies are all over it.”

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