Residents, insurance companies tally blast costs

TORONTO - Homeowners, businesses and insurance companies were tallying the damage Monday after a massive propane explosion in Toronto over the weekend that could wind up costing millions of dollars in damage and lost business.

While it's still too soon to estimate exactly how much the cleanup will cost, the pricetag will likely run in the millions of dollars from damaged homes and businesses, retail shutdowns and other interruptions caused by the explosion.

The blast at Sunrise Propane Industrial gases early Sunday morning forced the evacuation of a neighbourhood that houses about 12,000 people and several businesses.

Brenda Rose, broker and vice-president at Firstbrook Cassie and Anderson in Toronto, said insured resident will likely recoup their losses from damage to homes and businesses, since standard insurance policies will cover destruction from an explosion.

"Fire, explosion -- those are fundamentals," she said, noting that the magnitude of the damage is unlikely to be known until the claims made to individual insurance companies are tallied.

"It is early in the process to know the kind of damage, so we don't really know a dollar figure," agreed James Geuzebroek, a spokesman with the Insurance Bureau of Canada, the national trade association of the country's property and casualty insurance industry.

"There's also the question of how much of the damage was insured -- apparently there are quite a few renters in the neighbourhood and many of them did not have tenants' insurance."

Police said Monday that 50 people among the thousands who fled a massive propane explosion couldn't immediately return to the northwest Toronto neighbourhood because of "significant damage" to their homes.

While the buildings are standing, police said, siding has been ripped off, windows smashed, and some houses are believed to have been demolished.

On the business side, Bombardier Inc. (TSX:BBD.A), Canada's only aircraft maker, cancelled the early shift at its airplane plant in northwestern Toronto, which suffered serious external damage as a result of the blast.

It's unknown whether Bombardier had business interruption insurance to cover any losses from the plant shutdown.

Geuzebroek said the IBC wasn't yet sure about how other many businesses had been affected, but noted that insurance representatives dealing with area residents haven't encountered business owners looking for answers -- just homeowners and tenants.

Tenants lacking renters' insurance won't be able to recover any belongings damaged as a result of the explosion.

Business owners, however, will be covered on any property damage under their plans, and many are likely to have business interruption coverage.

"For as long as you can't operate and you're not making the money that you would normally make, there's insurance coverage for that," Geuzebroek said.

Bruce Cran, president of the Consumers' Association of Canada, said residents affected by the explosion should put in their insurance claims immediately.

"It's too late after the event to adjust your coverage to cover that sort of thing, but the main thing is to get the claim in and hear what your personal situation is from your insurance company," Cran said

"In the meantime, you've got to look after yourself as if you were not insured and you've got to make sure that any damages are mitigated by any actions you can take."

The city has launched a review of all areas that could pose a potential hazard to nearby homes in the wake of the explosion, to see if similar risks exist elsewhere in Toronto.