I swear to you that I had nothing to do with this: three families around me were relocated for months after a disaster that happened on their property. Anyone who says moving is saying that the cost of living will be paid for by the insurer. But if the work drags on, we may quickly reach the end of our allotted sum.
Posted at 7:30am
Tenants and apartment owners who only insure their personal belongings and leasehold improvements are affected. For what ? Because the amount for the additional living expenses is a percentage of their total coverage.
“The standard in the industry is a fixed percentage of 20%. And it’s not always possible to increase it, it’s a package,” says Louis-Thomas Labbé, CEO of Gallagher GPL Québec, an independent broker.
A person who owns $50,000 worth of property is therefore often faced with $10,000 in living expenses. It’s not easy to drink when you know the price of temporary “post-disaster” housing, furnished and fully equipped. Depending on the size and location, it costs between $2,000 and $4,500 per month.
Also, if water damage, a fire, or a tornado (last year there were 26 in Quebec) suddenly makes our living space uninhabitable, we’ll go to the hotel for a few days. We eat in the restaurant. We deposit the pet in a guesthouse. The bill quickly reaches $1,000.
At Desjardins, the cost of living for certain policies was increased from 20% to 50% of total coverage around 2015. “The change was made proactively to better meet the needs of co-owners,” explains spokeswoman Valérie Lamarre.
Until all insurers do the same, some people will get into trouble.
This is the case of Geneviève Gervais, mother of three children aged 5, 7 and 9. The brand new apartment she rents in Mascouche was completely flooded in early December due to a dishwasher hose. Her $8,000 living expenses are gone and she doesn’t know where to turn.
I sympathize because I experienced the same thing. Coincidentally, a friend is currently struggling with this problem.
PHOTO PROVIDED BY GENEVIÈVE GERVAIS
Geneviève Gervais was on vacation at Disney with her family in early December when the disaster struck at her home.
The two-bedroom apartment found by Geneviève’s insurer costs $4,200 a month. The difference in price will be reimbursed with his rent of $1,625. The work must be completed in April or May, she told me desperately.
If the mother lived in a condo and still had to pay a mortgage, it would be even worse. His additional living expenses would then be $4,200. In less than two months, his total of $8,000 would have been gone.
This type of problem isn’t very common, says the Insurance Bureau of Canada (IBC). But I was still told that the cost of living was an issue in Gatineau when a tornado destroyed low-income housing in 2018.
Some families had insured their belongings for $8,000 or $10,000. Her living expenses of around $2,000 were accompanied by the cry “Strong winds! »
Geneviève now realizes that her $45,000 insurance really isn’t enough, especially given the cost of living. But it wasn’t part of the conversation when she negotiated her insurance policy with Beneva in March 2022, she said.
Insurers and brokers are finding that this is not a concern for their customers. “When you’re in trouble, you wake up,” says Louis-Thomas Labbé of Gallagher.
“We minimize home and moving insurance needs,” adds Marie-Eve Vezina, Senior Director, Compensation, at Desjardins Assurances.
However, the multiplication of water damage coupled with shortages of labor and materials has meant that recovery time has increased by 30% to 40% since 2019, according to Desjardins Insurance. The average time is now almost four weeks, a statistic that obviously masks large disparities.
This situation is already making policyholders impatient, eager to find their bed and belongings. “It has been problematic since the beginning of the pandemic. This is not fun. You have to manage expectations and priorities,” said René-Charles Landry, president of GUS, a disaster recovery specialist.
Bad news: With climate change, a further increase in flooding is to be expected. At the same time, the reconstruction is delayed…
It would therefore be wise to discuss the cost of living issue with your agent or insurer. Marie-Eve Vezina believes $20,000 is a “safe amount.”
As for Geneviève, if the responsibility is obvious or recognized, she could ask the insurer of the entity responsible for the disaster to pay for her move until the end of the work. In certain cases, a corresponding request can also be sent to the company that insures the building (apartments or condominiums).
Good luck to all victims, my friends and others.