Insurance and Wildfires in B.C.
Insurance and Wildfires – some information gathered together by BCREA:
As of August 6, more than 300 active fires were burning throughout BC, with evacuation orders and alerts impacting hundreds of properties. From a real estate practice perspective, it’s important for REALTORS® to know what their clients should expect with regard to home insurance for those living in areas affected by wildfire.
First of all, existing insurance policies and renewals aren’t affected.
Second, insurance is for unforeseen events. So, when a client’s home is in an area under evacuation alert or order, it’s fair to expect that new insurance policies are unlikely to be approved until the threat eases. Some insurers may also restrict new policies based on proximity to fires, even when no evacuation orders or alerts are declared. Changes to existing insurance policies, such as requested increases to coverage limits, may also be declined.
Third, insurance for properties in unprotected fire districts is more expensive than in protected fire districts. An unprotected fire district is an area without fire hydrants and a fire department. What can REALTORS® do?
- Buyers who have trouble obtaining insurance should be encouraged to contact several insurance providers, because they have different approaches and criteria.
- Where buyers aren’t able to obtain insurance, they should seek legal advice.
- REALTORS® can help protect homebuyers by using the Subject to Fire/Property Insurance clause developed by the Real Estate Council of BC:
“This offer is subject to the Buyer obtaining approval for fire/property insurance, on terms and at rates, satisfactory to the Buyer, on or before (date). This condition is for the sole benefit of the Buyer.”
- Brokers may also wish to contact their company solicitors for guidance as to how they should deal with this issue.
- FireSmart Manual from the BC Wildfire Service: www.bcwildfire.ca/Prevention/firesmart.htm.
- Tips and information about fire safety from the Insurance Bureau of Canada: www.ibc.ca/bc/disaster/fire.
- Information on evacuation orders and alerts from EmergencyInfoBC: www.emergencyinfobc.gov.bc.ca.