Between wildfire evacuations, alerts, road closures and complications with getting insurance needed to secure a mortgage many people wanting to sell or buy property in the Cariboo had to put their plans on hold for most of the summer.
Typically insurance companies will not write policies for the transfer of properties that are within an active wildfire area, because the risk of fire is known and insurance is issued on the basis of unforeseen risk, said Aaron Sutherland, vice-president of the Insurance Bureau of Canada Western and Pacific branch.
“Wildfires are a very real and knowable risk,” Sutherland said, noting that policy renewals are not affected by wildfires.
As of 2015 he said there are 116 carriers of home and business insurance operating in B.C. and each company has its own criteria around issuing insurance when it comes to a property’s proximity to wildfires.
Distance from the wildfire, evacuation orders, and alerts may all be considered by a company and may be quite different from one company to the other which is why the bureau encourages people to shop around when they are looking for insurance.
“It is a very active and competitive market place,” Sutherland said. “Just because one company says no doesn’t mean they will all take that position.”
Court Smith, vice-president of the B.C. Northern Real Estate Board and a realator in Williams Lake, said that while things are not back to normal yet, the insurance issues that came with the wildfires in the Williams Lake area during July and August are slowly subsiding.
“Insurance companies are starting to write policies again depending on where properties are located,” Smith said.
In his office at Sutton Cariboo Realty he said they had to extend the closing dates on the sale of about 35 properties that were in progress when Williams Lake was evacuated and the purchasers were unable to secure insurance.
But he said they didn’t have anyone cancel a purchase because of the delay in getting insurance.
He said insurance will continue to be difficult to get around active wildfires.
In the short term he didn’t think the wildfires will have a negative impact on the local real estate market but it is too early to determine what the long term impact of the fires will be on the local economy.
Diane Buchanan an independent mortgage broker with 17 years of experience with Dominion Lending Centre-Canadian Mortgage Experts said she only had one or two lenders who put the breaks on lending because they were afraid that Williams Lake would turn into another Fort McMurray.
“Even with our extreme situation most lenders were still willing to lend, so it all came down to house insurance because you can’t get a mortgage without house insurance,” Buchanan said.
On the flip side she said lenders were very empathetic with existing clients who were adversely impacted by the wildfires, given the added costs of being evacuated and losing time off work.
“I provided lender contact information for my clients and the lenders were able to defer mortgage payments for two to six months depending on the impact of the wildfires on the client.”
“It was a scary time,” Buchanan said of the city’s wildfire evacuation and alert orders. “Basically everything was on hold for July.
She found that while some insurance companies wouldn’t insure new purchases within 25 kilometres of an active fire while for others the range was 50 kilometres. Insurance was not available while communities were under evacuation orders and in some cases not available under evacution alerts as well.