Flood Insurance – Rest Easier – Know What’s Covered

A new study titled, Canadian Voices on Changing Flood Risk, surveyed 2,300 people living in high-risk flood zones across Canada. It found 94 per cent of people surveyed didn’t know their homes were at risk, and most have taken no action to protect their homes from floods. (*CBC Radio)

Craig Stewart, Vice-President of federal affairs for the Insurance Bureau of Canada, estimates that only 10 to 15 per cent of Canadians have overland insurance, which is offered as an add-on to insurance policies.

Stewart says that’s because it’s a new product that wasn’t available prior to 2013. Insurers started working on the overland flood insurance add-on after the 2013 severe flooding incidents in Toronto and Alberta, but it took time to roll the policies out. Stewart says the product has been available since late 2015.

The low uptake is likely because most Canadians only interact with their insurance broker when the time comes to renew their policy. “Most people are not aware that overland flood insurance is available,” Stewart says. “Therefore, unless they have been directly in a conversation with their broker or their agent at the time of renewal over the past year, they likely won’t have it.”

Talk to your insurance representative to make sure you have appropriate coverage. Be aware that:
• Damage to your home caused by the sudden and accidental bursting of plumbing pipes and appliances is usually covered by all home insurance policies.
• Historically in Canada, home insurance policies haven’t covered loss or damage caused by overland flood damage, which occurs when bodies of water, such as rivers, dams overflow onto dry land. This has begun to change. Some Canadian insurers have started to offer overland flood coverage for policyholders, but this type of coverage is new on the market and not all insurers are offering it. Check with yours to see if it is available and if you qualify for the coverage because if you live in a known flood plain, the coverage may not be available.
• Water damage in a basement that backs up through sewers, floor drains, toilets and showers maybe covered if your policy covers sewer back up or you may have purchased the coverage as an optional endorsement. So, speak to your insurance representative to understand what coverage and limits you have.
• Damage to homes caused by hail or wind is usually covered. This includes damage caused by flying debris or falling branches or trees, or damage caused by water entering through sudden openings caused by wind or hail.

*Information sited from the Insurance Bureau of Canada