By Stephanie Lewis
Centretown residents insured by CGU Insurance Company of Canada will no longer be covered against terrorist attacks.
Glen Gower, who lives on Arlington Avenue, has been insured with CGU for five years. He recently received a letter from them saying that his policy would no longer include insurance against acts of terrorism.
“We do not insure loss or damage or any claim arising from: caused directly or indirectly, in whole or in part, by terrorism…,” the letter states.
The loss of coverage is not what Gower is most concerned about.
“What concerns me the most is that this company considers Ottawa a big enough risk for terrorism to stop covering it,” says Gower.
Lynda Hester, director of corporate communications for CGU, says the new policy amendment is not something particular to Centretown.
“This letter is a standard communication that goes out to all policy holders (across Canada) at renewal time,” says Hester.
“It has nothing to do with the Ottawa area.”
In fact, such letters are becoming standard, according to Suzanne Sabourin, executive director of government relations for the Insurance Bureau of Canada.
Sabourin says this is a direct result of Sept. 11.
“The damage from the attacks caused havoc in the insurance industry.”
She explains that all insurance companies have to be insured by groups called re-insurers, who provide the money for payouts.
After Sept. 11, re-insurers have excluded terrorism from the insurance they provide to companies.
Insurance companies, who depend on the money provided by the re-insurers, must also exclude terrorism from the insurance they provide to their policy holders.
“As result, terrorism is being excluded from policies all across Canada,” says Sabourin.
Despite the widespread nature of the change, Randal Marlin, a philosophy professor at Carleton University who teaches a course on propaganda, warns that consumers should be wary of this new exclusion in their policies.
“Insurance companies are always very cautious when it comes to areas where they haven’t built up a statistical base,” says Marlin.
“They make their money based on predictions and with terrorism, they’re not sure. It’s on a scale they haven’t seen before.”
He explains that in the face of such an unpredictable issue, naturally the companies are going to want a clause that will give them an out.
The letter sent to Gower and others is an example of this and Marlin warns about its ambiguity.
“Depending on how you construe the term terrorism, it can give the companies more of an out then they’re entitled to.”
Marlin adds that a conscious consumer should find out about the reputation of a company to protect themselves against hidden meanings.
“A wise person seeking insurance should ask around about their company and the use of escape clauses in the past,” he says.
Sabourin agrees that it is important for a policy holder to understand the extent to which he or she will be covered.
“I encourage people to sit down with their insurance agents and make sure they understand what their policy does and does not cover.”