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An Insurance Guide for Canadian Snowbirds

According to Environment Canada,  "in an average year, more Canadians die from exposure to winter cold than from lightning, wind storms and tornadoes combined." With one of the most severe winter climates in the world, it's only natural that a number of residents find the concept of "snowbird" living appealing.

As northerners who relocate to warmer southern climates during winter's harshest months, snowbirds are in understandably good company. Government figures estimate that half a million Canadians currently own winter homes in the state of Florida alone. The 2007-2013 strengthening of the Canadian dollar made cross-border transactions enticing in the post-Great Recession years. Proximity, ease of travel and cultural similarities are a few of the other features that continue to make a purchase attractive.

But before you move ahead with any seasonal escape plans, Dave Macfarlane, Managing Director of HUB International's Western Canada Business Development operations, has some crucial advice. "It seems simple," he says," but I can't say enough. Talk to an insurance professional who understands the international exposures of snowbirds."

The right guidance is critical. Macfarlane and his colleagues are in possession of an endless list of cautionary tales about seasonal travelers who thought they had adequate coverage - only to learn the hard way that they were ill-informed and under protected.

Beyond Homeowners Insurance

A standard homeowners policy is only common sense for Canadians who purchase properties in the United States. Unfortunately, in Macfarlane's experience, too many customers assume this type of policy is a catchall for all calamities. Not so.

He offers the example of a family from Edmonton or Calgary who might relocate to California when temperatures drop. "California is an entirely different landscape than these residents are used to. Wildfires, earthquakes, floods - almost anything can happen." If and when it does, homeowners who find themselves without specific policies for these events can be left with a huge loss and no means of recovery.

In the wildfire scenario, Macfarlane says, "Policyholders in high-risk areas should register their homes in a wildfire protection program offered by their insurance carrier." Once they do, the carrier will take proactive steps to protect the property, such as coating the home with gel in the event of a fire outbreak. But here's the rub: many snowbirds don't know what they don't know, underscoring the need for a trusted and knowledgeable insurance advisor.

Macfarlane also recalls a cluster of three particular customers who bought high value second homes in the Cabo San Lucas, Mexico hurricane belt. Two of them purchased hurricane insurance. One of them didn't.  Macfarlane observes, "In some ways the decision is understandable. Hurricane insurance policies are not cheap. For these types of homes, a policy can cost upward of $40,000 annually." But when the customer who didn't purchase the coverage experienced severe wind property damage, he was left with major regret.

Flood insurance is another important consideration for snowbirds with second homes. Despite its hospitableness and warm temperatures, those who flee Canadian winters for Palm Springs, California are certainly subject to flooding. Macfarlane notes, "Our people on the ground refer to late summer/early fall in these areas as 'monsoon season." And if your snowbird property is located in a mountainous region, rather than a valley, don't assume you can live without flood insurance. "In 2010, one of our largest customer claims came from a homeowner living in - you guessed it - the mountains," says Macfarlane.

The Rest of the Insurance Picture

Clearly, doing everything you can to protect your snowbird residence in the event of all types of loss is important. But there are a number of other insurance concerns of which winter escapees should be aware.

If you're a snowbird who enjoys driving to your winter destination, make sure your owned automobile is covered correctly. Many Canadians have the mistaken impression that insuring a car through a local broker in Canada is enough. Macfarlane says, "This is a big problem we see recur over and over. If a customer travels with their car and are in breach of coverage, they have no insurance. Period."  The common repetition of this mistake underscores the need to talk to an insurance professional who understands the full risk scope for snowbird commuters.

Finally, snowbirds should plan for any potential medical expenses that could be incurred with the purchase of a travel medical policy. As Macfarlane notes, "We all know the horror stories of significant medical bills in the US." For Canadians spending three to four months out of the country each year, the right coverage is critical. However most travel medical carriers have restrictions on pre-existing conditions, age limits and other variables, so choose carefully and deliberately.

There's something wonderfully adventurous about escaping harsh winter weather for more tolerable climates. But don't be spontaneous about protecting yourself, your property and your loved ones. The insurance needs of snowbirds are complex and diverse. Enjoy the season with warmth and peace of mind. Have a conversation with a HUB Personal Insurance broker with the experience and expertise to address all your coverage needs.