SGI Canada won’t be insuring any home bought in the La Ronge area until all fires within 50 km of the community are “extinguished”.
It has brought the local housing market to a virtual standstill — because without insurance, people can’t get mortgages.
SGI spokesman Kurtis Reeder says the company has never seen this before.
“This is really an unprecedented situation,” he says. “We have not seen this in Saskatchewan before or any of the other provinces that we operate in. This is truly an unprecedented situation.”
Reeder says SGI typically uses the 50 km radius as the underwriting guideline, but is willing to show some flexibility.
“We typically consider the fire being extinguished before we will write new business,” he says. “But depending on the particular situation of the fire, and the risk that that fire is posing to a community or if it has moved away from the community, we would kind of look at that on a case-by-case basis. But our general rule is that the fire is to be extinguished.”
According to SGI’s Marie Schultz, “The guidelines are 50 km, but we are flexible with the term ‘extinguish’. ‘Extinguish’ means the fire is no longer active. If it is active but we don’t view the fire as being a risk to that property, we can issue a policy. We will still review the application if they are within 50 km, but we look at each application individually to determine the risk. This 50 km radius has always been around but people may be hearing more about it this year because this situation is more intense.”
Local realtor Dave Longpre worries what this policy could do to the La Ronge housing market for the rest of the summer.
“We had some deals that were closing in mid-July and that’s when things got really messed up,” he says. “We were lucky to get everybody insured that we needed to. But if this goes on for any length of time, any new deals coming along are going to be subject to insurance and it could slow the whole industry right down.”
Longpre says two other insurance companies (The Co-operators and Aviva) were initially continuing to insure homes in the La Ronge area, but that has since come to a stop.
Meantime, the restriction SGI put in place on July 3 to not issue any new policies or add new coverage to existing policies on property products in the Northern Administration District was lifted last Thursday (July 23).