Insurance responsibilities for damaged or destroyed property

When property is damaged or destroyed, insurers must notify Finance and Treasury Board of the loss if specific conditions are met. The department may place a lien on insurance payouts to recover unpaid property taxes.

Insurers must notify Finance and Treasury Board within 48 hours if:

• The property damage or destruction is $5,000 or more.
• A formal proof of loss has been received under an insurance policy covering the property.

If there are unpaid property taxes or penalties:

• These unpaid amounts are treated as a first charge lien against the insurance payment for improvements to the property.
• The department must notify the insurer within 10 days if it wishes to place a lien on the insurance money and specify the amount of the liability.

If the insurance payout is equal to or less than the lien amount:

• The insurer must pay the department the full insurance payout.

If the insurance payout is greater than the lien amount:

• The insurer must pay the lien amount to the department.
• The remaining balance is paid to the insured property owner.

The lien does not increase the amount payable under the insurance policy.

During a declared state of emergency (federal or provincial):

• When property damage is over $10,000, the department might notify the insurer to waive any property tax liability.