IBANS Stresses Coverage Options for Redlined Policyholders

Terri Goveia | January 29, 2010

Policyholders in Cape Breton affected by arson in the region still have coverage options, according to the Insurance Brokers Association of Nova Scotia.

Continued fire losses in Cape Breton and northern New Brunswick have prompted at least one insurer—The Cooperators—to rethink coverage in those regions, affecting an estimated 1,600 homeowners. The policyholders have received non-renewal notices, asking them to reapply for coverage after meeting electric wiring and other standards.

However, coverage is still available, according to Ken Myers president of IBANS’ board of directors. “While recent events are of concern, the current marketplace is allowing for each property insurance policy to be underwritten on its own merits.”

Nova Scotia’s insurance brokers are ready to help affected policyholders find new coverage, says Karen Slaunwhite, IBANS’ executive director, who encourages policyholders to go over their options with a broker.

Company limiting exposure
The Co-operators is taking a “new approach” to coverage in the affected areas to control its exposure, according to Leonard Sharman, the company’s spokesman.  Among their new measures: “[We’re] inceasing home inspections in these areas, focusing on things like wood heating, older wiring and oil tanks,” he told CI via email. “ We're asking clients in these specific areas to reapply for the new product, rather than renewing their existing policies. That way, we'll have a chance to better assess their homes, recommend safety-related work, and explain the changes in our policies.”

Without those changes,  “I'm not sure we could continue to sell home insurance in these areas,” he says. “We want to continue to serve these communities, rather than pull out, and our hope is that these changes will allow us to do that.”