Global News picturing one of my melted for sale signs in front of a burning property. 

If You Were Evacuated. Call Your Insurance Company Now. 

Speaking from experience, if you have been evacuated from your home due to the Tantallon Forest Fire, call your insurance company to start a claim. Do it now.  It does not matter if you do not know the condition of your property.  You will not know its condition until you return to it. The best case scenario means that could be in the coming days, but in my scenario it took upwards of a month.

My Story (Skip to the advice section if you would prefer)

In May 2016, we had an abnormally warm week. We were used to the smoke from forest fires in Alberta, as our town was nestled deep in the boreal forest. But this was different.  At times from the outset, it felt as though we were surrounded.  On my way home from work, I recall a water bomber attacking a new brush fire that had just sparked between the highway and the subdivision I called home. They had it under control, right?

We truly believed we were safe and to compound that feeling, we awoke the following morning to clear blue skies. As if the events from the past 24 hours hadn’t occurred, went about our day like we would any other.  Until, like a pressure cooker, the horizon exploded.

*Taken from the back yard of our home. 

The temperature spiked and the wind changed. The fire was on us like a lion on its prey. Be prepared for evacuation they told us, but we didn’t believe it would happen. We wished we had listened, as we scrambled to pack everything we could, with an inevitable feeling that we would never come back to the place we called our home.

I can’t help but draw parallels for what happened when I was fleeing Fort McMurray and Hammonds Plains Road.  Our town was an extreme example with two exits. You can go North or you can go South, but there is only one road.  Upwards of 70,000 people evacuating via one road is alarming, but so is the fact Hammonds Plains Road serves a similar scenario.

In the face of fear, people withheld their panic to allow others into the driving lanes to flee – even as flames were licking the side of their vehicles and threatening to jump the highway. And so, we drove to a small village, some 50km outside the town and then with the advice of a firefighter friend in my ear – if you think you’ve gone far enough, triple your distance.   The village we ran to the first night was evacuated 48 hours later.

*Our frantic evacuation packing list. 

The weeks that followed were difficult.  While we had reached safety in Edmonton, the smokey haze was replaced with a cloud of uncertainty.  We combed through twitter on a constant basis trying to get some news.  We did not know if our home had survived the fire and even if it did, what condition it would be in when we got back.  How much of the town had burned? What it would mean for our jobs? When we would be allowed back to the city?

As it turned out, the wait to return was far longer than we anticipated.  It was 25 days from when the fire first hit that we came back.  The re-entry to the area was staggered, with different zones given access over the course of a week.  Natural gas had to be turned safely back on and electricity restored. We were also under a boil water advisory for more than a week. We were back, but that’s when the real work started.  I’ll do my best to summarize the steps I took as I remember it.  

Call Your Insurance

If you haven’t done so already, call your insurance company to start a claim.  It is important to know the extent of your insurance coverage for what comes next.  For example:

  •        Evacuation Expenses - Keep all your receipts so you can talk about claiming the amounts back.
  •        Displacement Coverage - How much displacement coverage do you have and how long does it last? Your insurance company may provide you a monthly amount in which to secure a rental while you rebuild.
  •        Understand Coverage – What coverage do you have in the event of a total loss versus damage?
  •        Property Damage - How much coverage do you have for remediation due to fire/smoke damage?
  •        Payout vs Re-build - If your home did burn down, what does the policy state for a re-build versus a payout? Some policies will provide for a full re-build, but only a percentage of the cost if you choose to take the payout instead.
  •        Lost Revenue - Do you have coverage in the event of lost revenue from a tenant?

Another benefit of opening a claim is that you’ll be further ahead in the game when it is time to be assigned an adjuster. Your house may not have burned down, but there are numerous other aspects to consider upon your return:

  •        Smoke damage – This was the most common claim for homes in the city as nearly all of them had smoke damage to some degree. Commercial air-scrubbers were used while carpets were steam cleaned and walls washed.  
  •        Attic insulation - Due to the toxic nature of some of the plastic and building material that was burned, it was necessary to test attic insulation. We had tests done on all our properties to ensure the insulation was not contaminated.  If it was, our insurance policy allowed for a full replacement.
  •        Heat damage - If you were in close proximity to the fire, it was important to assess if the heat compromised the seals in your windows or the integrity of the roof shingles or siding.
  •        Spoiled food - We were without power for the month we were evacuated, unable to return home.  You can imagine the awful state we came back to when our full fridge and freezer were allowed to defrost in hot temperatures.  This had multiple impacts, both to replace the appliance, but also to repair/replace the damaged flooring/sub-floor below it.

We did not close our claim for an entire calendar year, as we wanted to ensure that any impacts that may have occurred to the siding/windows were monitored for the rest of the summer and through the winter season as well.

Call Your Bank

In the event you do not have extended coverage for displacement or a loss of revenue from a rental property, your bank may consider freezing your payments for a period of time.  I was a Realtor in Alberta.  If I couldn’t sell homes in the city I lived in, I didn’t have the revenue to pay my bills. We were able to get our mortgage payments put on hold for a few months while things returned to a semblance of normal.  If you don't have displacement insurance or your coverage ends, you might not be able to afford a mortgage and rent at the same time.  Your bank will almost certainly help you make a plan in this regard, with the additional time added to the end of your existing mortgage. 

Not all Insurance Adjusters are Created Equal

While I was tackling insurance-related issues at the homes I owned, I was also coaching several of my clients through the process.  Your adjuster should be an advocate for you and your family.  Unfortunately, that was not always the case.  If your adjuster is not responsive or is rushing you through the process to close a claim, I would request a new one from your insurance company.  My adjuster walked me through the process of the claim and brought my attention to matters I wouldn’t have thought about (like window seals and attic insulation).  As well as your adjuster, you need to be your own advocate to move your claim forward.

Keep Fire Remediation Reports

Another key piece through this process was collecting proper records.  Imagine you had an oil leak on your property.  You’d be required to provide an extensive package outlining how the spill was remediated and that it was done properly.  Fire and smoke damage is similar.  Keeping a copy of everything you’ve done to address the damage is important now, but also if you go to sell your home in the future. Documentation you may want to keep:

  •        Roof/siding/window repair or replacement
  •        Attic insulation testing/replacement
  •        Cleaning
  •        Soil testing/replacement in the event of contamination
  •        Air samples from in the house
  •        Condition of oil and propane tanks

We had a client who’s property was due to close the day we evacuated.  This was problematic, as he had already purchased a home in another city.  If his house did not close, he would lose his deposit on the purchase and be subject to further liability.

 The buyer of my client’s property was refusing to close, citing the fire damage that had occurred. While nearby homes had burned,  I advocated for my client via his adjuster to assess the condition of his property.  We were able to address the issues in a timely manner and the property had a clean bill of health, with a full document package provided to the lawyers. The buyer was then contractually obligated to close on the transaction so that mine could move forward with their purchase.

Re-Build versus Payout

For those of you who have lost your homes, I am deeply sorry.  In Fort McMurray, the emotions surrounding the loss of a home caused people to feel completely overwhelmed. Many made rash decisions when it came to whether they took an insurance payout or decided to rebuild.  The problem was that a lot of insurance policies would provide for a full rebuild, but only a portion of the amount if you were to take a lump sum payout. This became a problem in the following circumstance.

The Payout

A homeowner decided to take a payout and used the funds to pay off a portion of the mortgage and remediate the land the home used to sit on.  They were then planning to use the sale of the lot to settle the remaining debt with the mortgage as the insurance policy was not enough to pay off the full amount of the loan.  The problem was that several “fire-lots” hit the market at the same time, saturating the market.  There was also the stigma surrounding the lot, even though it had been remediated correctly.  The result was it took a long time to sell and when it eventually did, it was at a discounted rate that wasn’t enough to pay off the remainder of the mortgage.  The owner had to come up with extra money out of their own pocket to settle the debt.  

I’m not suggesting that re-building is the only option, but it is important you run all the numbers to make sure taking a payout is financially viable before doing so.

The Re-Build

People who rebuilt their homes were taking on a significant project.  However, it also provided an opportunity for some people to make the best of the situation.  Take one of my family members as an example. His 40 year old property burned to the ground - it was a semi-detached home on an abnormally large lot.  When he rebuilt, he was able to get approval to build a detached property instead, which was brand new.  This had a far more positive financial impact than if he simply took a payout and then tried to sell a vacant piece of land.

Even if you have no intention of selling the home upon completion of the build, you’ll have the chance to work with a builder to design a home you love.  It will of course never replace the one you lost, but it does provide an opportunity to start new.

Finally, by choosing to rebuild, you will gain equity as the market increases.  I am not suggesting this is the easy option. Your rebuild will take upwards of a year so should not be approached without care and consideration.  However, real estate values are extremely likely to increase over those twelve months.  Upon completion of your build, you will have a new home in a market where homes are more expensive.  Whether you move into it or decide to sell to capitalize on the increased equity is up to you.

A Word of Warning – the devastation in Fort McMurray created the need for numerous builders. This meant some contractors with limited or no experience tried to capitalize on the situation. The result was some homes were built to extremely poor standards with delays, defects, and an overall lack of professionalism.  Interview at least three builders before selecting one to build your home.  

Affect on Real Estate Values

When the fire tore through Fort McMurray, it destroyed 20% of the homes in the city.  This had a significant impact on the real estate market which was previously declining at a rapid rate due to the price of oil.

Loss of Properties

When you lose 20% of the available housing in an area, it obviously creates a problem for those who wish to stay in the city.  Yes, many decided to leave but there were a larger number who stayed. That usually meant finding a place to rent while they rebuilt their homes.  In most cases, people had some sort of displacement coverage from their insurance company for monthly rent. The cost of rent went up significantly during this period.

Tenant Insurance

Ironically, a lot of people who were previously renting decided to purchase a home at this time.  Those lost their rental home who had a tenant insurance policy were given a cash payout for their loss.  Previously, they may not have been able to save a down payment for a home. Instead, they used their insurance payout to fund the down payment and took the opportunity to get on the property ladder.  This, coupled with a low vacancy rate meant home prices started to increase as well.

Contractor Activity

The final impact of the fire was the influx of contractors to the city.  It is no small task to rebuild 2,400 homes.  It took several years and during that period, provided extensive job opportunities – bringing life to an ailing economy.

Applicable to Nova Scotia?

At time of writing, it is reported the fire has destroyed 151 homes - I hope with all my heart the number doesn't increase.  This is tragic and I do not mean to belittle the loss in any way.  However, it is a far lower percentage than in Fort McMurray.  The impact on the real estate market is likely to be minimal. 

What Now?

In a time of crisis, I am always amazed by how people pull together.  I hope that if you have lost your home, you feel that you can ask for help.  I know the entire Nova Scotia community will be behind you while you overcome this horrible loss. 

If you have questions about the Fort McMurray Forest Fire and how my experience might be of help to you, please reach out to me anytime.


Chris Perkins

Posted by Chris Perkins on
Email Send a link to post via Email

Leave A Comment

Please note that your email address is kept private upon posting.