How Does a State of Emergency Affect Home Insurance?

The COVID-19 infection continues to spread. Though numbers of cases and deaths in Canada are enviable compared to those of Spain, Italy, or the U.S., they continue to rise. So too does the unemployment rate due to the lockdown, which has many Canadians struggling to pay their bills on time including auto and home insurance.

Insurance companies are aware of the challenges their customers are facing, and many are taking steps to help by way of emergency relief measures to help them cope.

On March 17, the province of Ontario declared a state of emergency. It recently extended it until May 12. Alberta has declared a more limited state of public health emergency, which allows the province to take central control of health care for 30 days, and it renewed for up to 90 days.

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What Happens When a Government Declares a State of Emergency?

A state of emergency allows governments to invoke certain powers, for example, closing non-essential services and banning gatherings, to protect the populace.

While provinces and even municipalities have their own variations on the theme, the federal definition of a state of emergency includes situations that:

  • Endangers the lives, health, or safety of Canadians, and is of such proportions or nature as to exceed the capacity or authority of a province to deal with it
  • Threatens the ability of the government to preserve the sovereignty, security, and territorial integrity of Canada
  • Cannot be effectively dealt with under any other Canadian law

Ontario has declared a state emergency only twice previously, both times in 2003, in response to the severe acute respiratory syndrome (SARS) epidemic, and the massive northeast blackout that summer. States of emergency are occasionally declared for large forest fires and crippling floods.

So, the impact of a declaration of a state of emergency will depend on the nature of the emergency.

In this pandemic, the major disruption we are experiencing is “social or physical distancing”. To keep large groups of people out of proximity, non-essential businesses and offices may be closed. Most large companies have a telecommuting infrastructure that’s up to the task of allowing its employees to deal with customer inquiries from home.

Can I Get a House Inspection During a State of Emergency?

It may be problematic for home inspectors to conduct a review of a dwelling and property during the coronavirus lockdown.

The Ontario Association of Home Inspectors (OAHI) has determined inspections are an essential service, since they support the safe operations of homes and businesses. OAHI has instituted protocols to ensure the safety of inspectors, and they may refuse jobs if they’re uncomfortable about the infection status of the parties involved, and reviews will be done by teleconference.

What Does a Home Insurance Policy Cover?

In a basic home insurance policy, the perils that are covered are specified; in a comprehensive contract, the perils named are those that are excluded from coverage. In either case, damage resulting from poor maintenance or neglect are not covered.

Generally, a state of emergency declaration shouldn’t affect your home insurance coverage unless your policy is up for renewal.

A state of emergency declaration’s impact on home insurance policies varies by company. For insurers that have implemented an emergency endorsement, it will grant an extension on the expiry date of a home insurance policy. The length of that period depends on the insurer, but typically it is up to 120 days. Other insurers that do not have an emergency endorsement are handling the matter on case-by-case basis.

If your home insurance policy is up for renewal or will be soon, you have options. In addition to contacting your home insurance provider to inquire about an extension on your existing policy’s expiry date, shop around to compare rates and policies to find the policy that suits your needs best.

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