Are Fort McMurray homes insured for fire?

Home insurance could cover a rebuild or a cash payout



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Nothing is as traumatizing as losing your home. That’s what the residents of Fort McMurray, Alta., are having to deal with because of extreme wildfires that have destroyed their houses and caused a mass evacuation of more than 88,000 people. Of course, most homeowners likely had home insurance but what exactly does the policy cover? “Standard polices, which are the policies most average Canadians carry, all cover the rebuilding of the same-size home that was destroyed,” says Adam Mitchell of Mitchell and Whale Insurance Brokers in Whitby, Ont. That’s all.”

But rebuilding on their land in Fort McMurray may not be desirable to a lot of residents of the flame-engulfed community, who may not have jobs to go home to when the fires have cleared. Would standard home insurance policies cover them if they chose to rebuild their home somewhere else? “Unless it’s a higher value home policy, then no,” says Mitchell. “Standard home insurance policies don’t cover this option. Only higher-value home policies do.”

Higher-value homes are generally those that cost more than $1 million in construction costs to rebuild. “In those cases, home insurance would pay for a $1 million rebuild of your original home or offer these owners a cash value for their property,” says Mitchell. “They’ve paid a higher premium for the cash-out option on these homes.”

Insurers prepare to assess damage from Fort McMurray »

Track your expenses

In either case, the good news is that your insurance company will pay for all your living expenses until your new home is built and ready for you to move back in. It also covers the cost of possessions you had in your home and living expenses incurred while unable to stay in your residence. That means the tab for all living expenses, including rent and utilities, will be picked up by your home insurer. The key is to track all expenses and keep all invoices while waiting for the rebuild.

But one thing your insurer will not cover is the cost of any mortgage payments owners have to make on their home. “Insurance companies don’t take over these payments,” says Mitchell. “Just like credit card payments and other bank loans, you’re on the hook for making your monthly mortgage payment and paying off your mortgage yourself.”

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How you can help

If you’d like to make a donation to the residents of Fort McMurray, the Canadian Red Cross has set up a place to make contributions at Alberta Fires Emergency Appeal.

You can also donate $10 dollars when you text the word FIRES to 45678.

Other ways to donate:

  • Text the word REDCROSS to 30333 and a $5 donation will be added to your wireless bill
  • Text the word REDCROSS to 45678 and a $10 donation will be added to your wireless bill

Prime Minister Justin Trudeau announced this week that the federal government will be joining Alberta in matching individual donations made for Fort McMurray disaster relief, so your $10 will go twice as far. So far, the Canadian Red Cross has already received $11 million in donations, according to CBC News. Here’s more information about what the Red Cross is doing to help.

If you’re in the surrounding area and want to offer up your home for displaced Fort McMurray residents, Airbnb is coordinating free accommodation and waiving all service fees associated with short-term rentals.

Finally, Edmonton Emergency Relief Services are collecting diapers, baby wipes, toiletries, and other necessities. Donations are to be made at the ERS offices, downtown Edmonton. They will allocate the donations where needed most.

Want to help those fleeing Fort McMurray? »
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7 comments on “Are Fort McMurray homes insured for fire?

  1. Does a fire of this size become “an act of God” and render a policy worthless?


    • Hi Cat,
      No, every standard policy includes fire (size doesn’t matter). Fire is fire and covered in all policies in Canada.


    • Hi Cat,
      No. Fire is covered in all home insurance policies — even basic policies that only cover structure (and not contents). Home insurance was first created because of catastrophic fires–fires that would wipe out entire towns and cities.


  2. Why would insurers pay to rebuild in Fort McMurray which is now a known fire hazard zone?
    Isn’t it akin to rebuilding in a known flood zone?
    Maybe Fort Mac should never have been built in the first place.
    Maybe it will return to being camps like it should have been in the first place.


  3. Any comment if the person has no house insurance (slipped his mind unfortunately). Is there any assistance as it was a mandatory evac?


  4. Yes, the insurance policy covers against fire and they can provide a top, a lump amount for the one insured and in need. However, if the house had a mortgage, the mortgage must be honored first, so the money that remain, I believe are very tight to rebuild a new home – on the same land only,
    It is a very unfortunate situation what happened to communities from Fort McMurray.
    My take is that Government of Canda and Alberta should pump up money on all the houses that were lost by wildfire, even if they had or not home insurance, even if they had or not mortgage on them.
    Besides that, the wildfire regulations, the fire in the forests should be against the law at all times and the regulations should be re-enforced and re-worked.


    • Many people are dis-honest and cancel their policy after proving to banks (Mortgages) they have insurance & THEN they expect a BAIL OUT when something BAD happens…& it always does. IT happened to Insurance Industry during the 2013 Calgary Floods WE ALL pay for THEIR Bad Choices!! I WONDER HOW MANY PEOPLE actually HAD HOME OWNERS’S INSURANCE in Fort McMurray?? Just saying I knew they made a lot of money up there but many tried to save a dollar….not being mean just to say let’s call a spade a spade & see flip side!


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