Insurance company adjusting coverage in Cape Breton because of high fire rate

The Canadian Press ~ The News
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GLACE BAY, N.S. - An insurance company says it's cancelling hundreds of clients' coverage in Cape Breton and northern New Brunswick because the number of fire-related claims is soaring.
Leonard Sharman of Co-operators General Insurance Company said Tuesday that about 1,600 people around Glace Bay, N.S., have been told they will have to reapply for insurance when their current coverage expires.
He said the company has already paid out $13.3 million in fire losses alone for the two areas in the first seven months of this year.
"About 67 per cent of our claims expenses on home incidents have been related to fire, which is far and away out of whack compared to the rest of the country," he said from Guelph, Ont.
Sharman said the company is adjusting plans for people in parts of Cape Breton and an area in northern New Brunswick around Bathurst because of the high number of fire claims.
Coverage will now be on the market value of the house rather than on a replacement cost.
But it will likely mean insurance rates will increase and clients will have to hire inspectors to check their wiring and heat sources in their homes.
Dave Wilson, a member of the Nova Scotia legislature who represents people in Glace Bay, said the shift is unfair to people who have dutifully paid their insurance and not had any claims.
He has written Finance Minister Graham Steele and the superintendent of insurance asking the province to get involved.
"I think it's a bit heavy-handed on behalf of the insurance company to single out areas," he said. "It just leaves people out in the cold who've had home insurance with that company for years."
Wilson said he's getting calls from worried residents who claim they are being told they will no longer be insured because of where they live.
But Sharman said the company is paying out up to $1.75 for every dollar it's taken in through premiums.
"In this area, the losses we've been suffering, you know a lot of companies just won't sell home insurance in these areas and we're trying not to take that approach," he said.
Wilson said the Cape Breton Regional Municipality has to take some responsibility for leaving vacant buildings up too long.
Cape Breton police have been kept busy in recent months investigating several suspicious fires in abandoned buildings.

Organizations: Co-operators General Insurance Company

Geographic location: Cape Breton, GLACE BAY, New Brunswick Guelph Bathurst Nova Scotia

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Recent comments

  • EmmaCay
    March 13, 2012 - 11:40

    Great post. I loved working with Guelph Insurance. They were so great at finding my family and I the best possible coverage for the lowest price. Keep up the good work.