Some homeowners in flood-ravaged Alberta are banding together in an attempt to name and shame insurance companies that have rejected their claims for sewer backup damage following recent floods.
Residents of the Elbow Park neighbourhood in Calgary say some insurance companies are approving claims while others are not — despite similar policy wording.
That just doesn't make sense to Tom Carter, who is exhausted after spending the last week gutting his finished basement of contents that were ruined by two metres of smelly sewer water.
"It is disappointing, Carter said Tuesday after his claim was rejected by AMA Insurance. "I was sick to my stomach. You think you are covered and then you find out that you are not.
"The houses on either side of us are covered through other companies."
Carter, his wife, Julia, and their two sons now must manage without their living room, spare bedroom, furnace, washer and dryer, TV and the children's toys. The basement also needs structural and electrical repairs.
AMA, RBC named and shamed
The inconsistency in insurance assessments is making people angry and frustrated, Carter said.
They wonder why an insurance adjuster from one company approves a claim for sewer backup in one home while another adjuster from another company says no in a house next door, blaming the sewer backup on flooding?
Some people whose claims have been rejected have put up signs on their property chiding their insurance companies for not stepping up to help them.
Two that have been singled out for denying claims include AMA Insurance and RBC Insurance.
Troy Bourassa, director of claims for AMA Insurance, said it all comes down to the precise wording of a policy.
"Each insurer has different language that responds to sewer backup, and our particular language is very clear," he said.
"Ours excludes damage caused by flood and excludes sewer backup damage when that sewer backup was caused directly or indirectly by flood."
Bourassa said the quick ruling by the adjuster will help Carter, because it will provide him with paperwork he will need to file a disaster recovery claim with the Alberta government.
RBC Insurance did not address why some claims were being denied.
"During this very difficult time for Albertans, we have increased the number of teams on the ground to review each homeowner's situation individually and process claim payments quickly," the company said in an email to The Canadian Press late Tuesday afternoon.
"We are reviewing each case individually to look for ways to help our clients. We are also assisting in other ways including deferring payments for auto and home insurance."
Bad PR for companies
Steve Kee, a spokesman for the Insurance Bureau of Canada, said such disputes are strictly between policyholders and their insurance companies.
He said every policy and house is different. It's up to trained professionals to make the call.
"These are sewer backup situations. Adjusters are going to determine what the situation is," Kee said.
Paul Smith, Carter's neighbour, said the insurance industry is going to suffer a public-relations black eye if it doesn't sort the mess out.
Smith, whose insurance claim was approved by Aviva Canada, said it is incredible that companies can treat people differently when they've all suffered property losses under the same circumstances.
"I think it is an unacceptable position for the insurance industry to find themselves in, and if the insurance companies are not very careful, they are going to find themselves in a very prolonged public-relations campaign," said Smith, who is chief financial officer of Calgary-based Talisman Energy.
"I think insurance companies should reflect and look at some of their competitors who are taking the high road and ruling on the side of the insured rather than on the side of small print."
Insurance ombudsman can review cases
People who have uninsured property damage can apply to the Alberta government for disaster recovery money to make some household repairs and to replace some essential items, but there are restrictions on what people can claim.
Joanne Aime, another Elbow Park resident, is upset with RBC Insurance for denying her claim.
Aime said it is great that RBC has donated money to Alberta flood relief and that some company employees have volunteered to help during the crisis, but that isn't what she needs from the company.
"When we purchased our insurance from RBC, we trusted them as a company that would do the right thing in a situation such as this," she said. "To get a blanket denial for our claim left us both surprised and deeply disappointed."
Carter said he believes some insurance companies are counting on governments and taxpayers to pick up the tab for some claims that really should be covered by insurance.
He said he hopes to appeal the rejection of his claim with AMA Insurance but has been told he must wait until company managers return from vacation later this month.
The Alberta government regulates the insurance industry in the province but doesn't get directly involved in adjudicating disputes between consumers and private businesses.
Chris Bourdeau, a spokesman with Alberta Finance, said a dispute can be appealed to a national body called the General Insurance Ombudservice.
He said the government expects companies to honour their contracts and hopes they keep the best interests of their clients in mind, especially in light of the recent devastation suffered by people in southern Alberta.
"We are seeing many Albertans and Alberta companies really step up and go that extra mile to help their neighbours, their friends, their communities, their clients deal with this incredible situation we have down there," he said. "The insurance industry is no different."