Home insurer delays while couple freezes: Roseman

A couple waited two months in a freezing home to get their heating fixed by their insurer. Hiring their own contractor led to only a small settlement.

Insurance companies admit they find it hard to cope with severe weather events such as the ice storm that hammered Toronto last December. Stretched to capacity, they often use a triage system – as hospitals do – to deal with the worst cases first. CANADIAN PRESS FILE PHOTO 

By: Ellen Roseman On Your Side, Published on Tue Oct 14 2014

 

Sandra and William lost their power during Toronto’s ice storm last December. They later found their boiler had sprung a leak, knocking out their home heating.

The couple waited two months in a chilly house for Aviva Canada, their insurance provider, to restore the heating. Fed up with the slow response, they hired a contractor to replace the boiler system at a cost of $27,500.

Aviva Canada agreed to cover only $6,500 of their costs, saying it hadn’t approved the claim before they went ahead with the work. An appeal to the ombudsman didn’t help.

“We believe we were mistreated by Aviva,” says Sandra. “It is unacceptable to keep a family without adequate heat for two months during the coldest winter on record in Toronto.

“The company is arguing that the work was not necessary, but they did not respond in a reasonable way or in a reasonable time frame when we were freezing and sick.”

As winter approaches, homeowners could face another storm that results in property damage and insurance claims. How can they get good service during a crisis?

Insurance companies admit they find it hard to cope with severe weather events. Stretched to capacity, they often use a triage system – as hospitals do – to deal with the worst cases first. 

The ice storm last December resulted in more than $200 million worth of property damage in southern Ontario. Aviva faced more than 1,400 claims in a short period, said spokesman Glenn Cooper.

“In these situations, our adjusters are forced to prioritize, based on severity of damage and customer safety,” he said. “After events that have such a widespread impact, the unfortunate situation is that contractors are at capacity, resulting in service delays and longer wait times for repairs.”

Sandra and William stayed home rather than move out and charge for additional living expenses, as their policy allowed them to do. They thought their claim would be handled more quickly.

Here is a summary of their two-month ordeal.

On Dec. 27, the couple shut off the water going to the heat exchanger. On Dec. 30, they informed Aviva of the issue. On Jan. 2, Aviva’s restoration company sent someone to replace the soaked attic insulation.

On Jan. 7, another contractor came to check the heat exchanger. The couple never heard anything again.

On Jan. 14, yet another contractor came to the home and found a fire hazard. The heat exchanger’s motor was still connected to electricity and was turned off.

On Jan. 21, the couple contacted their insurance broker. Could it ask Aviva’s adjuster to return their calls and report on their claim?

On Jan. 28, the adjuster left a telephone message, telling them to go ahead and hire their own contractor to resolve the heating issue. 

On Feb. 13, the couple called the adjuster – who was not available – and left a message. There was so much damage caused by freezing and loss of power that the entire system had to be replaced. Was that OK?

On Feb. 14, they left another message for the adjuster, whose voice mail did not give details of anyone else to call. Aviva’s customer service centre said they had to use the same adjuster and wait for a return call.

On Feb. 21, their chosen contractor restored the heating.

On Feb. 28, the adjuster called and left a message, saying she had been sick. Could they send the contractor’s report?

Aviva’s ombudsman, Lori DeAcetis, told the couple they had misunderstood the instructions given by the adjuster (by voicemail message). They were authorized only to obtain an estimate for review. Meanwhile, the insurer offered only $6,500 because the home’s heating system could have been repaired. 

“When a system fails due to inability to handle certain events, insurance policies do not cover replacement – just as a roof that is old and in need of replacement would not be covered if a leak were to occur,” Glenn Cooper added.

Advice: If you are told to hire your own contractor, do not proceed with work until you have the insurer’s approval in writing for the costs. Keep calling until you reach someone in the claims department.

Source: http://www.thestar.com/business/personal_finance/insurance/2014/10/14/home_insurer_delays_while_couple_freezes_roseman.html#