The Fraser Institute: Provincial Insurance Laws Requiring Split Coverage for Earthquake Insurance Likely to Cause Added Suffering and Delay Recovery
(firmenpresse) - VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 08/25/11 -- If a major earthquake strikes one of Canada's major cities, victims will endure unnecessary hardships and prolonged waits for property damage insurance claims due to the split coverage set out under provincial insurance laws, concludes a new report from the Fraser Institute, Canada's leading public policy think-tank.
"Insurance laws in every province differentiate between types of damage resulting from an earthquake, which creates legal disputes and significant waits in claims processing. This will hurt individuals and delay broader recovery," said Neil Mohindra, director of the Fraser Institute Centre for Financial Policy Studies and author of .
The report notes that Canadian provincial insurance laws make a distinction between damage caused by the ground shaking and fires ignited following an earthquake. Fire protection is part of standard home insurance packages, while earthquake coverage must be purchased separately.
"B.C. and Alberta have signalled their intention to maintain this distinction, but the experience from Hurricane Katrina shows why that is bad policy," Mohindra said.
In the aftermath of Hurricane Katrina, which struck the U.S. Gulf of Mexico coast in 2005, many victims had coverage through private insurance for wind damage but not separate flood insurance. The separation in coverage exacerbated the costs associated with the storm, including payment delays, court challenges, legal disputes, claims expansion, and disaster relief.
"This is a perilous situation, given the 30 per cent likelihood that a major earthquake will hit south-western British Columbia within the next 50 years, devastating densely populated Vancouver and Victoria," Mohindra said.
The report recommends allowing insurers to offer comprehensive coverage against damage from a quake and any quake-related fires to prevent many of the hardships Katrina victims faced.
"The aftermath of Hurricane Katrina demonstrated the problems that can occur when governments force people to buy separate coverage for different types of damage resulting from the same natural disaster," Mohindra said.
"Allowing insurers to offer comprehensive coverage against damage from the ground shaking and fires following an earthquake will help expedite recovery and reduce suffering by ensuring victims receive cheques from insurance companies as quickly as possible."
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The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of 80 think tanks. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit .
Contacts:
MEDIA CONTACT:
Neil Mohindra
Director, Centre for Financial Policy Studies,
Fraser Institute
(416) 363-6575 ext: 228
The Fraser Institute
Dean Pelkey
Director of Communications
(604) 714-4582
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Datum: 25.08.2011 - 04:32 Uhr
Sprache: Deutsch
News-ID 1033746
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