During BC's fire season, sometimes it seems like our entire province is aflame, and when you're in the process of buying a home, obtaining homeowner's insurance can be a real concern.
Fire Insurance Information
As of July 11, 240 active fires were burning throughout BC, with evacuation orders and alerts impacting hundreds of properties.
Video credit: Adrian Wagner.
From a real estate practice perspective, it’s important for REALTORS® to know what their clients should expect on the insurance front.
First of all, existing insurance policies and renewals aren’t affected.
Second, while insurance underwriters follow their own guidelines, it’s fair to expect that where evacuation orders or alerts exist, new insurance policies are unlikely to be approved until the threat eases. Some underwriters 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 are unable 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