No matter how prepared you may be nobody fully expects a natural disaster to occur when it does. However, there is a safeguard in place to protect your home in the event of a catastrophe. Home insurance is the best protection you can personally have in this instance as the Disaster Financial Assistance program (DFA) has changed. Between 2007 and the present day, $47 million has been paid out to local governments and persons. Due to this large sum, the DFA has made some changes in regards to how a person or place is covered. In the simplest terms, if an insurance company can provide coverage and the insured declines said coverage, in the event of a cataclysm they will not qualify to receive funds from the DFA.
“That sounds like a whole lot of jargon that I just don’t have the time or patience to read about.” Agreed, it’s not the most interesting topic but it is an important one so let’s start with when someone is eligible for the DFA.
The first requirement for the DFA is that the provincial government, after working with local governments, must declare the disaster eligible to receive assistance under this program. If they do not, unfortunately, no assistance will be given. Any damage in regards to the general public must have come from a non-insurable catastrophe. For a list of the eligible disasters, please see this link. Landslide related damages may or may not be eligible depending on whether or not the damage was caused by slope instability.
Damage from wildfires, earthquakes, and flooding can all be covered by insurance companies, therefore, they are not covered by the DFA. However, flooding coverage is a relatively new coverage offered by insurance companies, so there may be limitations on what areas are eligible. There are instances however, where a person may not be applicable for these from their local brokers or the cost may be unreasonably high considering the risk and not what the insured may find affordable. In these cases, exceptions may be made but it is best to look into what is needed to prove to the government in the event of a natural disaster that you as the insured tried your utmost.
Excluding local government, homeowners, tenants, small business owners, charities, and farmers are eligible for compensation. The DFA will first attempt to replace or rebuild the building, but only to a livable standard and only as it was before the disaster happened. The average claim is roughly $10,000 though the maximum value is $300,000. Contents are inventoried at a monetary amount with consideration to depreciation and be aware that other limitations do exist. If a person is earning money from their ventures then they must prove it’s their primary income in order to receive funding.
Please see the link below for all other information regarding the Disaster Financial Assistance program and don’t hesitate to ask your broker in the event that you are not eligible for insurance if you would be covered.