You can prepare your home for severe weather and purchase home insurance to protect from a disaster. However, when a natural disaster occurs, it can take weeks, months or longer for repairs. There are also several hazards you're responsible for if your home is damaged. From electrical to fire hazards, it’s important to mitigate risks during the cleanup process and file claims promptly.
Here’s what you need to know about the unexpected costs of disaster clean-up.
Estimating Clean-up Costs
As a homeowner, it’s always wise to have emergency money in case something unexpected happens. Whether your deductible is $250, $500 or $1,000, you’ll need to meet your deductible when you file claims towards your natural disaster cleanup and there are other associated costs.
Money for temporary fixes and repairs
If your roof is damaged, for example, you need to buy a tarp to use in order to temporarily block rainwater from causing further damage.
Money to secure your property
You might need to buy plywood to board up broken windows and damaged doors. This can reduce looting incidents by vandals if the property is unattended.
Money if your job is temporarily shutdown
If your job was affected by the natural disaster, you might need to rely on savings to cover expenses. Your business may not pay you if they’re closed and you’re a non-exempt employee, working part-time or an independent contractor.
Money for food, gas, shelter, and emergency supplies
You might be displaced from your home and living in a shelter or hotel short-term or long-term. If you have pets you might have to pay to shelter them if local shelters won’t accommodate them. You may also have to frequently travel some distance to your property to inspect it, make repairs, and meet with insurers and contractors.
Other Costs with Disaster Cleanup
There are additional costs associated with a natural disaster. These may not have a specific dollar figure associated with them.
Displacement, fraud delays and income disparity
- You might be displaced for weeks, months, or longer. It took one family six years before they could move back home. They made repairs totaling $80,000 but needed to raise the property by 3.35 meters. They had to start over because of a fraudulent contractor.
- Some families are vulnerable to severe weather events due to income disparity. They may not have immediate access to resources for repairs.
- You might be underinsured. If there's a severe fire and your policy covers replacement costs of $200,000, what if your home's replacement value is $250,000? You're out $50,000 because your home was undervalued. Note: Insurance covers the building cost of your home, not the value including land value of the property. Your insurance payout is designed to replace your structures, not to allow you to buy a new home.
Daily living habits
- You might have to uproot your children from school if you must temporarily relocate.
- You might have to change employers or work remotely if your employer was affected by the disaster.
- You might have your daily living activities (recreation, shopping, entertainment) disrupted if your community was affected by the disaster.
- You might have personal injuries (a fall or other injury, breathing disorders from mold or other contaminants).
- You might have the unexpected loss of a family member, friend, neighbor, pet(s) or livestock.
- Some families can become sick if they can't afford to relocate during repairs. They may breathe unsafe air, have unsafe housing and/or unsafe drinking water.
Assessing the Damage
Natural disasters can include hurricanes, tornadoes and earthquakes. They can also include severe rain and ice storms, wildfires and other extreme weather-related events. Depending on the natural disaster's severity, it can take time to get back to your property if you were evacuated and roads are down. However, make every effort to return promptly once law enforcement says it’s safe. Because you own the property, a few important steps are required by you as the homeowner.
- Assess and document the damage: Take photos and videos right away for insurance purposes. Don’t throw out damaged property until your claims adjuster has seen the evidence of the damage.
- Mitigate risks: Make the necessary repairs (tarps, plywood) to reduce further damage
- Determine if the property is livable: Is it livable or should it be boarded up while repairs are made?
- Contact your insurer: Call your agent right away to file a claim.
- Contact reputable contractors: Gather estimates and begin making repairs.
Typical Repair Costs
After a natural disaster, typical repairs are for the roof, plumbing, pipes and flooring. Repairs might also be required for windows, siding, and to repair gas lines. If you're unsure of the average repair costs, here are a few examples.
According to the Insurance Bureau of Canada, in 2016, Fort McMurray homeowners spent an average of $80,000 on repairs due to fire damage. The IBC also said that total damages from the fires were $3.6 billion.
Don't wait to file your claim and start repairs
If a fire caused damage to wiring it can become an electrical hazard. If the roof is exposed or windows shattered, rain can get in and mold can develop.
To protect your home
Install smoke detectors, purchase a fire extinguisher, and confirm there's no exposed wiring.
According to the Insurance Bureau of Canada, homeowners pay an average of $43,000 for repairs due to floods. The IBC also said that the Prairies suffered $240 million in damages last year. Ontario and Quebec suffered $85 million in flooding damages last April and Toronto's flooding totaled $80 million in damages a year ago.
Don't wait to file your claim and make repairs
If wet areas aren’t dried out and repairs made, mold can grow, and the air can become toxic. Additionally, wet floorboards can warp exacerbating damage if left unrepaired.
To protect your home
Ensure pipes are insulated in the winter and that you have a good draining system with no blockages. Promptly remove any standing water. Consider drainage systems, landscape grading or swales (shallow channels).
Damage from earthquakes
According to the Insurance Bureau of Canada, there are about 4,000 earthquakes every year in Canada. Additionally, earthquake damage isn't always included in traditional home insurance policies. RMS, a catastrophe modeler said that if an earthquake were to hit Quebec, it would cost about $15 billion in damages to homes and another $18 billion in damages to businesses (industrial and commercial).
The IBC estimates that within 50 years, British Columbia has about a 30 percent chance of having a major earthquake. Projected costs for a 9.0 magnitude earthquake in British Columbia would cost about $75 billion. While the estimated costs would be about $61 billion in damages if a 7.1 earthquake magnitude earthquake were to hit Montreal, Quebec City, and Ottawa.
Don't wait to file your claim and start repairs
Another earthquake can occur and increase your damages.
How to protect your home
Move heavy items to lower shelves. Add straps or brackets to bookcases so they won’t topple over. Store treasured keepsakes on higher shelves or keep them in secure bins. Store photo albums online safely in the cloud - and include a copy of your home insurance policy and other important documents. Have your home retrofitted. Homeowners that want to earthquake retrofit (secure the home's foundation) will spend thousands of dollars. Retrofitting can include installing brackets, bolts and braces to secure the home’s foundation.
Severe wind, ice storm or rainstorm damage
Ice storms can cause tree branches to bring down power lines or damage electrical masts while repair costs can total up to $1,200 for electrical masts. In 2013, one severe ice storm caused $12.9 billion in damages. According to the IBC, windstorms caused $25 million in damages for 2015 and $100 million in damages for 2016. The IBC also said that hailstorms can typically cause $30 to $60 million in damages. Pieces of hail can damage a roof, siding and nearby vehicles. With this type of damage, you would need to file claims with both your auto insurance company and your home insurance provider.
Don't wait to file your claim and start repairs
Broken windows or a hole in your roof can let rainwater in and cause wet conditions which can lead to mold. Frozen pipes that burst can lead to flooding and water damage can ruin floorboards and furnishings.
How to protect your home
Purchase storm windows and doors. Fix weak areas in your roof and insulate your pipes.
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Mitigate Risks: You’re Responsible for Reducing Hazards on Your Property
As a homeowner, you’re responsible for doing an individual assessment of your home. You need to find its vulnerabilities after a natural disaster to prevent unexpected hazards that can cause personal injuries. Even if the home isn’t livable, you’re still responsible for keeping the property safe. Insurers outline this as doing what’s reasonable and practical to mitigate further claim damages.
Speak to your contractor about parts of the property that need demolishing to avoid personal injuries. If you don’t and someone is injured or there’s further damage, your insurer might deny the claim. Or, it can result in a lower settlement amount.
Here are some examples:
- You don’t board up your windows and looters break in causing more damage.
- You’ve left live wires exposed and someone gets shocked.
- You didn’t put a tarp over the roof and rain causes mold, or you didn’t dry wet items that lead to mold.
- You haven’t made repairs to the roof and the ceiling falls, injuring someone.
Get help with reducing hazards
When your property is being repaired, there are several hazards to avoid. Talk to your contractor promptly about repairs to avoid personal injuries.
- Carbon monoxide hazards: Portable generators that need to be kept outdoors.
- Shock hazards: Electrical wiring that can cause injuries.
- Chemical and fire hazards: Spills from hazardous materials, toxic fumes, exposed gas lines or fuel lines.
- Siding or overhead debris hazards: Roofing or ceiling material that isn’t stable.
- Fall and injury hazards: Unstable flooring material, loose boards, falling equipment or exposed metal.
- Air quality hazards: Poor air quality can be toxic or lethal from carbon monoxide, smoke, chemicals or mold.
Consider Aesthetic Improvements
Natural disasters come with unexpected costs. However, there are ways to save money with the post-disaster cleanup. Your home repairs could become home improvements with tax incentives and/or reductions in energy consumption.
Save your receipts and contact your insurer about additions you plan to make. These changes may increase/affect your property’s value.
Ideas might include:
- Additions like new bathrooms, bedrooms, decks or garages
- Energy-efficient and/or built-in appliances
- Insulation to walls, attics, flooring, ductwork and pipes
- New ductwork, filtration systems, humidifiers and/or central heat and air
- New floors and/or carpet
- Raising your property (if in a flood zone)
- Septic, soft water and/or filtration systems
- Storm doors and windows, new roofing and a security alarm
- Window films to insulate from cold and hot weather
Tips on Hiring a Contractor
Before you hire a contractor, a few tips can help you avoid becoming the victim of fraud.
- Find registered and licensed contractors on sites like Angie's List or Home Advisor. Never rely on contractors "in the area" who might be targeting natural disaster victims.
- Ask friends or family for the names of contractors they used before and were happy with.
- Ask for references and get estimates. Don't assume the lowest bid is the best.
- Get your contract in writing, keep a signed copy and never sign blank contracts. Ensure the contract includes all work to be performed and includes descriptions of all equipment.
- Contracts should state that site clean-up and all trash removal is included. Contracts should have start and end dates, timelines and your payment terms. Include if you will void future payment if contractors don't show up to complete work.
- Include how the contractor will handle change orders (changes to the original contract) as this may affect the price and timeline.
- Never pay the full costs upfront. Only pay 10 percent and pay as the job is completed.
- Don't sign your insurance cheque over to your contractor. Pay with your own account to show a record of all payments. Let the contractor know if they purchase materials you need all receipts to avoid being overcharged. Keep good records and document every conversation in writing.
- Confirm that your contractor is insured. Ask for a copy of the contractor’s certificate of liability which includes your address as the location where the work is being conducted.
Avoid contractor fraud
Lastly and importantly, you'll want to avoid contractor fraud. There are many scams out there. Hence, it's imperative that you only hire reputable contractors that are fully licensed and insured. You'll have enough on your plate with disaster cleanup. You don't need to worry about a fake contractor trying to "clean you out", too!
Types of contractor fraud can include:
- Billing for work not completed or under-completed.
- Manipulating schedules, substituting materials and removing materials.
- Change order manipulations, fake payment applications, fake license information and fake receipts.
- Stolen equipment or items from your property.
- Contractors who inflate their experience or make false representations about the work they say they will complete.
If something looks or sounds suspicious, get legal advice. Homeowners have been scammed out of thousands of dollars from con artists.
Prepare for Severe Weather in the Future
To prepare for severe weather, read your home insurance policy and talk to your insurance professional. You want the best coverage and you need to understand your policy's inclusions and exclusions. You should also have a correct estimate when determining your home's value, so you won't be underinsured.
Coverage for debris removal
When reviewing your policy, check to see if it includes coverage for removing debris after storms to help with cleanup efforts. Talk to your agent or broker or shop around for insurance that offers this type of extension.
- If you need to hire dump truck drivers, rent dumpsters, and heavy machinery
- If you need to remove large amounts of wall, ceiling, and floor fixtures
- It can cover the workers, labour, and equipment
Protect Your Property with the Best Home Insurance
Severe weather incidents can cost billions of dollars and have unexpected costs. Hence, homeowners need savings for any sudden emergencies. Talk to your insurer about adequate coverage (to prevent being under-insured) and confirm incidentals are covered. Review your policy and any extensions. Floods, earthquakes and bioterrorism attacks may not be covered. Explore the types of weather-related incidents in your area. Then, if a disaster occurs, file claims right away and make prompt repairs. Only hire reputable contractors and look for ways to mitigate risks.
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