There will be months of delays at times to insurance claims, which will lead to material shortages and congestion in the industry’s supply chain, warned the CEO of the Canadian Automobile Association.
“Insurers are not going to be efficient,” said Greg May, the president and CEO of the Canadian Automobile Association, in an interview.
May was providing a preview of the predictions — and some of the collateral damage — that the mounting flood-related woes in British Columbia could have on the country’s national car insurance system, called the Transportation Claims Corporation (TCS).
The TCS, which insures third-party motor and passenger liability, expects to pay out up to $500 million in claims, according to the Canadian Automobile Association.
“TCS anticipates that paying out the 100-year rainfall, which is ultimately going to be a 100-year event, is going to put them at maximum capacity,” May told FP.
Compounding the challenges of providing insurance to flood victims, the TCS is already dealing with its own delays in paying out claims from two other recent storms.
“TCS suffered from persistent delays in claims settlement caused by torrential rains from July 27th to August 28th and then again from late August to early September,” said the organization in an e-mailed statement.
Despite calls for swift action, the TCS is preparing to rely on its insurance partners to provide coverage.
“The TCS is strategically positioned to offer new products and help expand coverage,” May said. “But as a government agency, they’re going to have to borrow, which is an unprecedented situation in Canadian history.”
This is not the first time the TCS has been threatened with financial and reputational ruin in the wake of weather-related tragedies.
The organization was close to insolvency in 2014 after a massive flood in Prince George, British Columbia flooded its downtown with two feet of water, inundating vehicles that had been stored in the basement of one of its premises.
Overcrowding was so severe that many vehicles, and residents of the area, were paying annual auto insurance premiums for vehicles that were no longer insured.
Follow along as L.M. St-Louis examines the consequences of the B.C. flooding, and how future inclement weather will impact the system the TCS operates.
Read the latest coverage of Hurricane Florence here.