At least one condo corporation is facing what is likely to be a steep repair tab after Toronto was drenched with a month’s worth of rain on Aug. 7.
Kevin Vuong, past condo board president and Ward 20 candidate in the upcoming municipal elections, estimates that the collapse of a fourth-floor storm drain caused six figures in damage in the Southcore community he calls home. He said so much water was released so quickly that the building’s first four floors were flooded, including the lobby, elevators, amenities and units.
After a persistent fire alarm signaled that something was amiss, Vuong soon learned through social media that many other downtown communities had been affected by what was trending on Twitter as #TorontoFlood.
It’s too early to know the full impact of the downpour, but the event serves as a reminder of the strategies available to condo corporations to streamline recovery and manage risks as extreme weather inflicts an increasing amount of destruction.
Extreme weather claims on the rise
It will be at least a few weeks before preliminary estimates of the property damage caused by last week’s heavy rainfall become available, said Pete Karageorgos, director of consumer and industry relations, Insurance Bureau of Canada, Ontario. Not including this figure, insurers have already paid out $800 million in claims connected to extreme weather across the province in 2018 to date, he said, which has Ontario closing in on the country-wide total for recent years.
“In Ontario alone this year — the year’s just well over half done — we’ve almost hit that $1-billion mark, so there is a definite impact of severe weather on properties that we’re seeing,” said Karageorgos.
What impact, if any, last week’s storm might have on insurance premiums is unclear at this point, he said.
“It would depend on what the long-term trend is that the companies are seeing that would perhaps impact rates,” said Karageorgos.
Vuong, citing the increasing prevalence of extreme weather events, predicted that both condo corporations and unit owners can expect to see higher insurance premiums coming down the pipe.
Stop-gap measures after the storm
Vuong also anticipated that restoration efforts in condo communities affected by last week’s storm could get slowed down by the volume of demand for contractors — a common experience of property owners affected by extreme weather events, Karageorgos confirmed.
Meanwhile, after last week’s flooding, Vuong’s building was down to two out of five elevators, which prompted his condo board to deploy a protocol it developed in response to past elevator problems, unrelated to flooding.
He explained that while one elevator continues to service all floors, the other elevator is only stopping at every third floor, ensuring residents, and particularly people with mobility issues, have a way to get to and from their units. Both elevators are being manned by additional security staff, as is the stairwell, which is open for use as an alternative route.
It’s important for boards to communicate with residents during these types of situations, said Vuong.
“Those kinds of things, though minor, are very important in actually ensuring people understand why decisions have been made the way they are, why things are inconvenient for them, and it helps alleviate that frustration,” he said.
Past events lead to expanded coverage
In condo communities, having a clear definition of what the corporation is responsible for restoring and what the unit owner is responsible for restoring helps streamline the claims process, said Karageorgos. This is normally captured in a standard unit bylaw, which boards require majority support from owners to pass.
“Insurance companies will want some clarity, and if that isn’t spelled out within those bylaws, of the standard unit, it takes a bit of work on the [part of] the adjuster and the unit owner to try and get through the appropriate paperwork,” said Karageorgos. “And so that could cause a delay in the repair starting, someone being out of their unit longer.”
Condo residents require individual insurance policies to cover their personal contents as well as any unit upgrades, which is not always well-known, Vuong observed. He said boards can take events such as last week’s downpour as an opportunity to make residents aware of this.
Boards should also regularly review the sufficiency of their corporation’s policy, said Karageorgos, who pointed out that offerings evolve, with expanded water-damage coverage becoming available after another significant summer rainfall soaked Toronto, back in 2013.
Said Vuong: “I hope that every board, going forward, whether they’re affected or not, will be asking the question of their property management: ‘If we have another Toronto flood, what are some problem areas that we should be keeping an eye out on? And what can we do to protect ourselves against that going forward?”
Michelle Ervin is the editor of CondoBusiness.