Albertans are currently reflecting on the wildfires that plagued so many people one year ago in our province. Though some time has passed and rebuilding is happening, the fires will continue to affect the real estate industry.
Home insurance was a huge factor, and continues to be. Insurers were on the hook for $3.7 billion in claims following the wildfires. To give that some comparison, the 2013 floods costed $1.9 billion in claims.
What this translates to, is higher insurance premiums and increased government debt to cover those costs. On average, $2 a month to $50 a month, but that all depends on the insurer.
But the rebound did also bring some bright spots, some of it funded by insurance payouts. [Pedro] Antunes [Conference Board of Canada] notes that in the months right after the fire in 2016 money was being put back into the hands of the displaced in the Regional Municipality of Wood Buffalo through insurance payouts that paid for everything from hotel accommodations to car rentals to restaurant meals. Firefighters, too, received millions in overtime pay and building contractors started rebuilding.
“All of this will add to economic activity in the area, both in 2017 and 2018 with $1 billion being added back into the economy,” says Antunes. [Money Sense]
Lessons for the future:
Contact your mortgage lender or broker right away if a major event that will affect your finances occurs. Being honest with your lender in the early phases will help you avoid penalties, get you on a payment plan and on your way to the best solution. Your lender or broker can provide you with the right advice, especially because they’ve helped others in similar situations.
The best reminder for yourself in tough times is that honesty really is the best policy. Looking for more information on how to find help? You can always contact me with any questions.
