Plummeting property values, rising insurance costs: Flood victims caught in new wave of grief

As Wood Buffalo council tries to decide what to do about flood mitigation in Fort McMurray's flood zone, residents have big concerns about what is going to happen to their private insurance. 

At a 10-hour special council meeting on Tuesday, dozens of residents called or wrote to tell council what they thought of administration's proposals to deal with flood mitigation. 

The administration's recommendations, presented to council by deputy chief administrative officer Matthew Hough,  include talking to residents in Waterways, Draper and Ptarmigan Court about potential buyouts and continuing with physical flood mitigation measures, such as building berms around Fort McMurray's downtown and Taiga Nova. 

"Private insurance is becoming more expensive over time and, for some residents, unaffordable or unavailable entirely," Hough said.

Bryce Kumka, senior account executive with Rogers Insurance, emphasized to council that it is important to find a solution quickly, particularly for the developed downtown where the greatest amount of investment has taken place.  

"We've already seen a significant retraction of coverage availability and significant increases for costs with respect to flood coverage for businesses in the downtown," Kumka said. 

Without getting that insurance, it will be more difficult to develop Fort McMurray's downtown because people will struggle to borrow money, he said.

• $80M condo complex stuck without insurance in Fort McMurray
• Soaring condo insurance rates help push Fort McMurray homeowner into bankruptcy

Kumka said some companies have opted not to provide any insurance in Fort McMurray, while others only offer limited coverage.

He predicts insurers may be more likely to offer coverage to homes and businesses in downtown Fort McMurray once the flood mitigation is completed. 

While not guaranteed, "there's generally a willingness to provide coverage where risk has been reasonably mitigated," he said. "It gives a fighting chance for the community to have an opportunity."

Kumka said one of his clients owns three downtown buildings valued at about $15 million. Before 2013, the client paid less than $1,000 for flood insurance. Last year, they paid about $48,000.

This year, the insurance company will be paying out $7 million for repair costs from the flood, substantially more than the premiums paid by the client. 

• Fort McMurray looking to revamp flood mitigation plans
• Fort McMurray spending millions on berms, but flood-weary residents want out

Multiple condominium owners at Longboat Landing reached out to express their concerns to council members.

Resident Olivia Martineau said her main concern as a condo owner is her insurance. She described calling her insurance company to get flood coverage for her contents. 

"They said, 'Sorry, you are in a restricted area. You can never have that enhanced water protection."

While the condo complex is covered for flood damage, the cost of the deductible is going up and Martineau is worried it could force some of her neighbours into foreclosure. 

Jamie Doyle, the RMWB's chief administrative officer, shared information from the Insurance Bureau of Canada, which says insurance companies have paid out about $436 million for Fort McMurray's recent spring flood. 

Doyle added the IBC has a risk manager available for Fort McMurray residents who can advise residents who are finding it difficult to get insurance.

Ashley Proulx, another Longboat Landing condo owner, said owners in her building are worried they'll never be able to sell their homes because of the location and the inability to get full insurance.  

"We could possibly lose our home at any time, all because of issues such as insurance." 

Christina Healy would like to see a full buyout of the entire neighbourhood, saying it's "not a safe place to live" and that "it's become clear to me that the municipality's not able to protect us." 

Before the flood, her condo's insurance premium went up by hundreds of thousands of dollars and they were denied flood insurance. 

"I just don't know where we're going to go from here." 

She said if Draper, Ptarmigan and Waterways homes are bought out, her home value will plummet. 

"We simply don't want to continue to pay a mortgage on a property that will continue to decline in value and can't be properly insured," she said. 

Coun. Keith McGrath introduced a motion, which was passed by council, to ask industry partners to help build the berms in Fort McMurray. He called the move an effort to expedite the construction and said he was looking for a solution that didn't involve forcing people from their homes in buyouts. 

Council also accepted all of the administration's recommendations for flood mitigation, and will get an update on proceedings on Sept. 15.