The summer of 2017 has been deemed the worst fire season on record by B.C. officials; wildfires consumed more than 1 million hectares and destroyed a number of ranches, homes and businesses. But ranchers who had to evacuate their properties or even worse, lost their livelihood to the fires, weren’t the only ones affected; farmers looking to buy and sell ranching properties in the province’s Interior suffered, too.
Insurance companies weren’t issuing new policies on properties in the province that had even the slightest chance of being affected by a wildfire.“I’ve been selling real estate for awhile, and there’s only been a couple of years where people had difficulty getting insurance because of fires,” says Gordie Blair, a farm realtor in the Thompson Okanagan region. This was one of those years.Blair had a number of deals fall through, simply because buyers were unable to get insurance in the midst of fire season. “They were saying if there was a fire within 50 km [of the property] they wouldn’t issue any new policies.”Blair says if a property is out of fire protection range, meaning a fire department won’t show up and save your home from a fire, insurance companies won’t risk insuring it.
One of his farm real estate deals that collapsed was in Chase, where he says no fires of note were burning, but insurance companies were still wary of offering protection. “I think that was harsh, but I could see where the insurance companies were coming from,” says Blair.
Aaron Sutherland, vice president Pacific at the Insurance Bureau of Canada, agrees that insurance policies are more difficult to come by during periods of increased risk in any region. “Insurance is for unforeseen risks,” he says. ‘If you’re in an active fire zone, that isn’t unforeseen.”
Sutherland says insurance companies will suspend the issuance of new policies or adding on to existing policies until any predictable risks have passed.
However, the Insurance Bureau of Canada encourages buyers to shop around for insurance, as brokers have different guidelines on how close property can be to a fire to be considered in an active fire zone.
Sutherland knows of companies that consider land within 25 km, 50 km and even under evacuation alerts and orders to be unfit to insure.
“This does present a challenge with real estate transactions,” Sutherland says, recognizing that insurance is a must when buying a new home and farm. “If you’re trying to sell in an active fire zone, be flexible,” he adds.
It’s tough to avoid purchasing a farm property during the summer, when the risk of wildfires is at its height. “The majority of farm sales take place in the spring and summer because farmers want to see the soil, see the production, they don’t want to see it in the snow,” says Blair.
But, the unpredictability of wildfires means buyers have to be prepared to be looking at properties that can’t be insured because the risk is too high. Sutherland and Blair both stress the importance of including the condition of ability to attain insurance when setting out the terms of sale for the buyer.
~Courtney Dickson