Below are some frequently asked questions regarding the sewer back up coverage and claim rating changes for Chieftain clients. This information was provided by Travelers Canada for Chieftain.
What changes are being made to sewer back-up coverage?
We are adjusting limits, pricing and policy wording to better recognize increasing sewer back-up loss trends and to reflect other factors such as where someone lives, their sewer back-up claim history and any mitigation measures they have taken.
How will the changes to sewer back-up coverage limits impact the customer?
The impact to customers will vary, taking into consideration where the risk is located, mitigation efforts (use of a backflow valve or sump pump with a battery back-up) and the history of sewer back-up claims at the customer’s current location. In force policies will automatically renew with the maximum available limit with the assumption that no mitigation is present.
Can a customer choose different coverage limits?
Yes, most customers will be able to select different coverage limits. In force policies will automatically renew with the maximum available limit with the assumption that no mitigation is present. Eligible customers will have the option to increase their limits by purchasing additional coverage (with proper proof of mitigation), or decrease their limits as a means to lower their premiums.
What is required for proof of mitigation?
Where applicable, customers need to demonstrate that a backflow valve or sump pump with battery back-up has been professionally installed at the risk location. Acceptable proof includes copies of receipts, invoices or documentation from a contractor, builder or dwelling inspector.
What will the premium impact be as a result of these changes?
The premium impact will vary between customers depending on location and the applicable sewer back-up coverage. Some policyholders have never had a sewer back-up loss.
Why is Travelers Canada limiting their coverage?
Due to an increasing trend of adverse weather patterns, the frequency of sewer back-up claims is expected to remain high. As a result, we will no longer offer coverage up to policy limits in all areas. We have varied the available limits by location to recognize different risk areas. Approximately 60 percent of customers can continue to purchase sewer backup coverage up to their full policy limits. The remainder of customers can purchase different limits depending on their individual needs (subject to eligibility). It is important to note that full policy limits coverage is not required in the majority of situations; 85 percent of all sewer back-up claim payouts in the last five years have been below $50,000. The median cost of all sewer back-up claims in the last five years was approximately $22,000. Approximately 82 percent of customers have the option to purchase at least $50,000 in coverage under the new program, which will meet the needs of most policyholders.
What policy wording changes are being made for sewer back-up coverage?
Policy wording changes are being made to our personal property products to clarify the exclusion for loss or damage caused by sewer back-up during a “flood”. We have also amended our sewer back-up policy wording to remove coverage for water escape from eaves troughs or downspouts.
Will existing Canadian Crest, Condominium, and Tenants policies be affected by these changes?
There are no changes to the sewer back-up coverage limits for Canadian Crest, Condominium and Tenant policies. We are, however, making changes to our sewer back-up policy wording for Canadian Crest, Condominium and Tenant policies. These changes clarify the exclusion for loss or damage caused by sewer back-up during a “flood”, and remove coverage for water escape from eaves troughs or downspouts.
What can a policyholder do to make sure they do not suffer a significant financial loss in the future due to water damage?
At Travelers Canada, our priority is to help clients manage risk. Visit travelerscanada.ca to access industry-leading “Prepare and Prevent” information that can help your clients prevent loss or damage, and even decrease the cost of their insurance.
Why was the claim rating program changed?
The new claim rating program provides greater segmentation based on the number of claims, time since the last claim, time insured with The Dominion and prior insurance. Also, the time period for claims has been expanded from three to five years. This increased segmentation provides more accurate pricing, which ultimately results in a better rate for long term and new business, claim-free customers. There are no changes to the claim rating within the Chieftain product.
What is the impact of the claim rating changes to in force policyholders?
Policies will be re-rated using the new claim rating factors. In force policies that previously received claim forgiveness will receive approximately the same premium credit as they did before the changes.
How will the policyholder be advised of all these changes?
Policyholders will be advised of the changes to their sewer back-up coverage and claim rating through a letter that will accompany their next renewal. Policyholders are also encouraged to contact their broker for coverage information and advice.
This document is provided for informational purposes only. It does not, and it is not intended to, provide legal, technical or other professional advice, nor does it amend, or otherwise affect, the provisions or coverages of any insurance policy or bond issued by The Dominion of Canada General Insurance Company, St. Paul Fire and Marine Insurance Company or Travelers Insurance Company of Canada and their subsidiaries and affiliates (collectively “Travelers Canada”). Travelers Canada disclaims all warranties whatsoever.
The Dominion of Canada General Insurance Company, St. Paul Fire and Marine Insurance Company and Travelers Insurance Company of Canada are the Canadianlicensed insurers known as Travelers Canada.
© 2014 The Dominion of Canada General Insurance Company, St. Paul Fire and Marine Insurance Company and/or Travelers Insurance Company of Canada. All rights reserved. Travelers and the Travelers Umbrella logo are registered trademarks of The Travelers Indemnity Company in the U.S. and other countries.