The next big worry for Fort McMurray evacuees? Insurance

Tamera Madden escaped Fort McMurray Tuesday in a slow bumper-to-bumper evacuation as flames consumed homes and buildings and clouds of black smoke hung forebodingly over the scorched oilsands city.

The Fort McMurray health and safety manager drove seven hours to Lac La Biche where she sought refuge with family. Madden, her husband and parents left behind a $710,000 three-bedroom home in Timberlea, an as-yet untouched neighbourhood north of Fort McMurray’s downtown.

“It was extraordinarily terrifying,” says Madden. “All of this is very scary. There’s a lot of fear about what could happen. The wind could change direction and we could be like the people who have already lost their homes.”

Madden is depending on social media for word from home and admits the uncertainty is frustrating. She and her husband have spent the last few days accounting for their co-workers at Laird Electric and Fort McKay Group of Companies. Madden expects it will be at least 10 days until she can return home.

“We feel exactly how a Syrian refugee would feel,” she says. “It’s surreal, like a movie. But we have to put this into perspective – we have everything we need. We have each other and our cat and my family and no one has been injured or killed. It’s just stuff.”

Strong winds and warm, dry weather have intensified the wildfire, which by Friday morning grew to more than ten times its original size or an area of about 100,000 hectares, which is 1,000 square kilometres, larger than the city of Calgary, according to CBC. Weather experts predict the fire will continue to grow until the city receives significant rainfall. While a cold front may help, it is feared the shift in weather could cause lightening which may prompt more fires.

Mandatory evacuation orders were issued in and around Fort McMurray prompting the exodus of 80,000 people over the past few days. Reports peg the property damage so far at 1,600 homes and buildings. The financial burden is expected to be a big one.

The fierce wildfires have destroyed millions in real estate that could cost the insurance industry a record-setting payout estimated at as high as $9 billion, according to what BMO analyst Tom MacKinnon told CBC.

MacKinnon said the insurance sector could face a payout that high if the city has to completely rebuild. He is basing his figures on lessons learned in the 2011 fires in Slave Lake, Alta. in which insurance claims totaled about $700 million. MacKinnon added that if only 25 to 50 per cent of Fort McMurray’s real estate is destroyed the damage would come in at $2.6 to $4.7 billion.

But a spokesperson with the Insurance Bureau of Canada (IBC) says it’s too early to begin speculating about the extent of the damage, though she suspects it won’t be small.

“It’s looking to be quite devastating [compared to Slave Lake],” says Celyeste Power. “I believe 400 homes had been damaged there and we’re seeing speculation of that being in the thousands in Fort McMurray. So while it’s too early to be definitive about it, I think, unfortunately and especially since the fire is still going, we’re looking at a very devastating situation.”

The bit of bright news is that if Fort McMurray residents have home and tenant insurance they are covered in the event of a fire.

“It’s important to keep receipts and if they’ve been evacuated under a mandatory evacuation additional living expenses are generally covered as well,” says Power. “Every policy is different so if you need to know what you’re entitled to under additional living expenses covered get in touch with your insurance rep.”

The IBC, in the meantime, is ramping up its efforts to help with the disaster by upping the number of bodies who can take calls from disaster victims. The bureau has also signed an order that will allow additional adjusters from the U.S. to help out should the need arise. Temporary claim hubs have been set up at evacuation centres in Lac La Biche, Edmonton and Calgary, where insurers are also providing those in need with emergency cash.

“Some left their homes with just the clothes on their back,” says Rosa Nelson of Intact Insurance, Alberta’s biggest insurance company.” They’re calling us and saying they’ve been evacuated and they don’t know if their house is completely destroyed or partly destroyed and all of that uncertainty is hard. It is heartbreaking when you have these big catastrophes.”

The Insurance Brokers Association of Alberta (IBAA) is busy recruiting volunteers and fielding phone calls from Fort McMurray residents, many of whom aren’t clear about what exactly their insurance covers, says Janis Losie, director of communications with the IBAA.

“This is not the type of thing that hits them every day,” Losie says.  “A lot of people are in a state of shock and they don’t know if their property has been damaged. They need to take a deep breath and they need to talk to their insurance company and feel reassured. You’d be surprised how well received it is when they hear that fire is covered.”

In an industry that is fiercely competitive, Power says it’s uplifting to see competing insurance companies and brokers pull together for the greater good.

“When it comes to crisis it’s all hands on deck,” she says. “That is so very heartwarming to see.”